32340 Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

42 CFR Parts 409, 424, 484, 486, and 

488 

[CMS–1689–P] 

RIN 0938–AT29 

Medicare and Medicaid Programs; CY 

2019 Home Health Prospective 

Payment System Rate Update and CY 

2020 Case-Mix Adjustment 

Methodology Refinements; Home 

Health Value-Based Purchasing Model; 

Home Health Quality Reporting 

Requirements; Home Infusion Therapy 

Requirements; and Training 

Requirements for Surveyors of 

National Accrediting Organizations 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), HHS. 

ACTION: Proposed rule. 

SUMMARY: This proposed rule would 

update the home health prospective 

payment system (HH PPS) payment 

rates, including the national, 

standardized 60-day episode payment 

rates, the national per-visit rates, and 

the non-routine medical supply (NRS) 

conversion factor, effective for home 

health episodes of care ending on or 

after January 1, 2019. It also proposes 

updates to the HH PPS case-mix weights 

for calendar year (CY) 2019 using the 

most current, complete data available at 

the time of rulemaking; discusses our 

efforts to monitor the potential impacts 

of the rebasing adjustments that were 

implemented in CYs 2014 through 2017; 

proposes a rebasing of the HH market 

basket (which includes a decrease in the 

labor-related share); proposes the 

methodology used to determine rural 

add-on payments for CYs 2019 through 

2022, as required by section 50208 of 

the Bipartisan Budget Act of 2018 

hereinafter referred to as the ‘‘BBA of 

2018’’; proposes regulations text 

changes regarding certifying and 

recertifying patient eligibility for 

Medicare home health services; and 

proposes to define ‘‘remote patient 

monitoring’’ and recognize the cost 

associated as an allowable 

administrative cost. Additionally, it 

proposes case-mix methodology 

refinements to be implemented for 

home health services beginning on or 

after January 1, 2020, including a 

change in the unit of payment from 60- 

day episodes of care to 30-day periods 

of care, as required by section 51001 of 

the BBA of 2018; includes information 

on the implementation of temporary 

transitional payments for home infusion 

therapy services for CYs 2019 and 2020, 

as required by section 50401 of the BBA 

of 2018; solicits comments regarding 

payment for home infusion therapy 

services for CY 2021 and subsequent 

years; proposes health and safety 

standards for home infusion therapy; 

and proposes an accreditation and 

oversight process for home infusion 

therapy suppliers. This rule proposes 

changes to the Home Health ValueBased Purchasing (HHVBP) Model to 

remove two OASIS-based measures, 

replace three OASIS-based measures 

with two new proposed composite 

measures, rescore the maximum number 

of improvement points, and reweight 

the measures in the applicable measures 

set. Also, the Home Health Quality 

Reporting Program provisions include a 

discussion of the Meaningful Measures 

Initiative and propose the removal of 

seven measures to further the priorities 

of this initiative. In addition, the HH 

QRP offers a discussion on social risk 

factors and an update on 

implementation efforts for certain 

provisions of the IMPACT Act. This 

proposed rule clarifies the regulatory 

text to note that not all OASIS data is 

required for the HH QRP. Finally, it 

would require that accrediting 

organization surveyors take CMSprovided training. 

DATES: To be assured consideration, 

comments must be received at one of 

the addresses provided below, no later 

than 5 p.m. on August 31, 2018. 

ADDRESSES: In commenting, please refer 

to file code CMS–1689–P. Because of 

staff and resource limitations, we cannot 

accept comments by facsimile (FAX) 

transmission. 

Comments, including mass comment 

submissions, must be submitted in one 

of the following three ways (please 

choose only one of the ways listed): 

1. Electronically. You may submit 

electronic comments on this regulation 

to http://www.regulations.gov. Follow 

the ‘‘Submit a comment’’ instructions. 

2. By regular mail. You may mail 

written comments to the following 

address ONLY: Centers for Medicare & 

Medicaid Services, Department of 

Health and Human Services, Attention: 

CMS–1689–P, P.O. Box 8013, Baltimore, 

MD 21244–8013. Please allow sufficient 

time for mailed comments to be 

received before the close of the 

comment period. 

3. By express or overnight mail. You 

may send written comments to the 

following address ONLY: Centers for 

Medicare & Medicaid Services, 

Department of Health and Human 

Services, Attention: CMS–1689–P, Mail 

Stop C4–26–05, 7500 Security 

Boulevard, Baltimore, MD 21244–1850. 

For information on viewing public 

comments, see the beginning of the 

SUPPLEMENTARY INFORMATION section. 

FOR FURTHER INFORMATION CONTACT: For 

general information about the Home 

Health Prospective Payment System 

(HH PPS), send your inquiry via email 

to: HomehealthPolicy@cms.hhs.gov. 

For general information about home 

infusion payment, send your inquiry via 

email to: HomeInfusionPolicy@

cms.hhs.gov. 

For information about the Home 

Health Value-Based Purchasing 

(HHVBP) Model, send your inquiry via 

email to: HHVBPquestions@

cms.hhs.gov. 

For information about the Home 

Health Quality Reporting Program (HH 

QRP) contact: Joan Proctor, (410) 786– 

0949. 

For information about home infusion 

therapy health and safety standards, 

contact: Sonia Swancy, (410) 786–8445 

or CAPT Jacqueline Leach, (410) 786– 

4282. 

For information about health infusion 

therapy accreditation and oversight, 

contact: Caroline Gallaher (410) 786– 

8705. 

SUPPLEMENTARY INFORMATION:

Inspection of Public Comments: All 

comments received before the close of 

the comment period are available for 

viewing by the public, including any 

personally identifiable or confidential 

business information that is included in 

a comment. We post all comments 

received before the close of the 

comment period on the following 

website as soon as possible after they 

have been received: http://

www.regulations.gov. Follow the search 

instructions on that website to view 

public comments. 

Table of Contents 

I. Executive Summary 

A. Purpose 

B. Summary of the Major Provisions 

C. Summary of Costs and Benefits 

D. Improving Patient Outcomes and 

Reducing Burden Through Meaningful 

Measures 

II. Background 

A. Statutory Background 

B. Current System for Payment of Home 

Health Services 

C. Updates to the Home Health Prospective 

Payment System 

D. Advancing Health Information Exchange 

III. Payment Under the Home Health 

Prospective Payment System (HH PPS) 

A. Monitoring for Potential Impacts— 

Affordable Care Act Rebasing 

Adjustments 

B. Proposed CY 2019 HH PPS Case-Mix 

Weights 


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C. Proposed CY 2019 Home Health 

Payment Rate Update 

D. Proposed Rural Add-On Payments for 

CYs 2019 Through 2022 

E. Proposed Payments for High-Cost 

Outliers Under the HH PPS 

F. Proposed Implementation of the PatientDriven Groupings Model (PDGM) for CY 

2020 

G. Proposed Regulations Text Changes 

Regarding Certifying and Recertifying 

Patient Eligibility for Medicare Home 

Health Services 

H. The Role of Remote Patient Monitoring 

Under the Medicare Home Health 

Benefit 

IV. Home Health Value-Based Purchasing 

(HHVBP) Model 

A. Background 

B. Quality Measures 

C. Performance Scoring Methodology 

D. Update on the Public Display of Total 

Performance Scores 

V. Home Health Quality Reporting Program 

(HH QRP) 

A. Background and Statutory Authority 

B. General Considerations Used for the 

Selection of Quality Measures for the HH 

QRP 

C. Proposed Removal Factors for 

Previously Adopted HH QRP Measures 

D. Quality Measures Currently Adopted for 

the HH QRP 

E. Proposed Removal of HH QRP Measures 

Beginning With the CY 2021 HH QRP 

F. IMPACT Act Implementation Update 

G. Form, Manner, and Timing of OASIS 

Data Submission 

H. Proposed Policies Regarding Public 

Display for the HH QRP 

I. HHCAHPS 

VI. Medicare Coverage of Home Infusion 

Therapy Services 

A. General Background 

B. Proposed Health and Safety Standards 

for Home Infusion Therapy 

C. Payment for Home Infusion Therapy 

Services 

D. Approval and Oversight of Accrediting 

Organizations for Home Infusion 

Therapy (HIT) Suppliers 

VII. Changes to the Accreditation 

Requirements for Certain Medicare 

Certified Providers and Suppliers 

A. Background 

B. Proposed Changes to Certain 

Requirements for Medicare-Certified 

Providers and Suppliers at Part 488 

VIII. Requests for Information 

A. Request for Information on Promoting 

Interoperability and Electronic 

Healthcare Information Exchange 

Through Possible Revisions to the CMS 

Patient Health and Safety Requirements 

for Hospitals and Other Medicare- and 

Medicaid-Participating Providers and 

Suppliers 

B. Request for Information on Price 

Transparency: Improving Beneficiary 

Access to Home Health Agency Charge 

Information 

IX. Collection of Information Requirements 

A. Wage Estimates 

B. ICRs Regarding the OASIS 

C. ICRs Regarding Home Infusion Therapy 

D. ICRs Regarding the Approval and 

Oversight of Accrediting Organizations 

for Home Infusion Therapy 

X. Regulatory Impact Analysis 

A. Statement of Need 

B. Overall Impact 

C. Anticipated Effects 

D. Detailed Economic Analysis 

E. Alternatives Considered 

F. Accounting Statement and Tables 

G. Regulatory Reform Analysis Under E.O. 

13771 

H. Conclusion 

Regulation Text 

I. Executive Summary 

A. Purpose 

1. Home Health Prospective Payment 

System (HH PPS) 

This proposed rule would update the 

payment rates for home health agencies 

(HHAs) for calendar year (CY) 2019, as 

required under section 1895(b) of the 

Social Security Act (the Act). This 

proposed rule would also update the 

case-mix weights under section 

1895(b)(4)(A)(i) and (b)(4)(B) of the Act 

for CY 2019. For home health services 

beginning on or after January 1, 2020, 

this rule proposes case-mix 

methodology refinements, which 

eliminate the use of therapy thresholds 

for case-mix adjustment purposes; and 

proposes to change the unit of payment 

from a 60-day episode of care to a 30- 

day period of care, as mandated by 

section 51001 of the Bipartisan Budget 

Act of 2018 (Pub. L. 115–123) 

(hereinafter referred to as the ‘‘BBA of 

2018’’). This proposed rule also: 

Proposes the methodology used to 

determine rural add-on payments for 

CYs 2019 through 2022, as required by 

section 50208 of the BBA of 2018; 

proposes regulations text changes 

regarding certifying and recertifying 

patient eligibility for Medicare home 

health services under sections 1814(a) 

and 1835(a) of the Act; and proposes to 

define ‘‘remote patient monitoring’’ 

under the Medicare home health benefit 

and to include the costs of such 

monitoring as an allowable 

administrative cost. Lastly, this rule 

proposes changes to the Home Health 

Value Based Purchasing (HHVBP) 

Model under the authority of section 

1115A of the Act, and the Home Health 

Quality Reporting Program (HH QRP) 

requirements under the authority of 

section 1895(b)(3)(B)(v) of the Act. 

2. Home Infusion Therapy Services 

This proposed rule would establish a 

transitional payment for home infusion 

therapy services for CYs 2019 and 2020, 

as required by section 50401 of the BBA 

of 2018. In addition, this rule proposes 

health and safety standards for home 

infusion therapy, proposes an 

accreditation and oversight process for 

qualified home infusion therapy 

suppliers, and solicits comments 

regarding payment for the home 

infusion therapy services benefit for CY 

2021 and subsequent years, as required 

by section 5012 of the 21st Century 

Cures Act (Pub. L. 114–255). 

3. Safety Standards for Home Infusion 

Therapy Services 

This proposed rule would establish 

health and safety standards for qualified 

home infusion therapy suppliers as 

required by Section 5012 of the 21st 

Century Cures Act. These proposed 

standards would establish a foundation 

for ensuring patient safety and quality 

care by establishing requirements for the 

plan of care to be initiated and updated 

by a physician; 7-day-a-week, 24-houra-day access to services and remote 

monitoring; and patient education and 

training regarding their home infusion 

therapy care. 

B. Summary of the Major Provisions 

1. Home Health Prospective Payment 

System (HH PPS) 

Section III.A. of this rule discusses 

our efforts to monitor for potential 

impacts due to the rebasing adjustments 

implemented in CY 2014 through CY 

2017, as mandated by section 3131(a) of 

the Patient Protection and Affordable 

Care Act of 2010 (Pub. L. 111–148, 

enacted March 23, 2010) as amended by 

the Health Care and Education 

Reconciliation Act of 2010 (Pub. L. 111– 

152, enacted March 30, 2010), 

collectively referred to as the 

‘‘Affordable Care Act’’. In the CY 2015 

HH PPS final rule (79 FR 66072), we 

finalized our proposal to recalibrate the 

case-mix weights every year with the 

most current and complete data 

available at the time of rulemaking. In 

section III.B of this rule, we are 

recalibrating the HH PPS case-mix 

weights, using the most current cost and 

utilization data available, in a budgetneutral manner. In section III.C., we 

propose to rebase the home health 

market basket and update the payment 

rates under the HH PPS by the home 

health payment update percentage of 2.1 

percent (using the proposed 2016-based 

Home Health Agency (HHA) market 

basket update of 2.8 percent, minus 0.7 

percentage point for multifactor 

productivity) as required by section 

1895(b)(3)(B)(vi)(I) of the Act. Also in 

section III.C. of this proposed rule, we 

propose to decrease the labor-related 

share from 78.5 to 76.1 percent of total 

costs on account of the rebasing of the 

home health market basket. Lastly, in 


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section III.C. of this rule, we propose to 

update the CY 2019 home health wage 

index using FY 2015 hospital cost report 

data. In section III.D. of this proposed 

rule, we are proposing a new 

methodology for applying rural add-on 

payments for CYs 2019 through 2022, as 

required by section 50208 of the BBA of 

2018. In section III.E. of this rule, we are 

proposing to reduce the fixed-dollar loss 

ratio from 0.55 to 0.51 for CY 2019 in 

order to increase outlier payments as a 

percentage of total payments so that this 

percentage is closer to, but no more 

than, 2.5 percent. 

In the CY 2018 HH PPS proposed 

rule, CMS proposed an alternative casemix model, called the Home Health 

Groupings Model (HHGM). Ultimately 

the HHGM, including a proposed 

change in the unit of payment from 60 

days to 30 days, was not finalized in the 

CY 2018 HH PPS final rule in order to 

allow CMS additional time to consider 

public comments for potential 

refinements to the model and other 

alternative case-mix models (82 FR 

51676). In section III.F. of this proposed 

rule, we are again proposing to 

implement case-mix methodology 

refinements and a change in the unit of 

payment from a 60-day episode of care 

to a 30-day period of care; however, 

these changes would be effective 

January 1, 2020 and would be 

implemented in a budget neutral 

manner, as required by section 51001 of 

the BBA of 2018. Since the proposed 

case-mix methodology refinements 

represent a more patient-driven 

approach to payment we are renaming 

the proposed case-mix adjustment 

methodology refinements, formerly 

known as the Home Health Groupings 

Model or ‘‘HHGM’’, as the ‘‘PatientDriven Groupings Model’’ or PDGM. 

The proposed PDGM relies more heavily 

on clinical characteristics and other 

patient information to place patients 

into meaningful payment categories and 

eliminates the use of therapy service 

thresholds, as required by section 

51001(a)(3) of the BBA of 2018, that are 

currently used to case-mix adjust 

payments under the HH PPS. There is 

also a proposal regarding how CMS 

would determine whether 30-day 

periods of care are subject to a LowUtilization Payment Adjustment 

(LUPA). The LUPA add-on policy, the 

partial episode payment adjustment 

policy, and the methodology used to 

calculate payments for high-cost outliers 

would remain unchanged except for 

occurring on a 30-day basis rather than 

a 60-day basis. 

In section III.G. of this proposed rule, 

we are proposing regulation text 

changes at 42 CFR 424.22(b)(2) to 

eliminate the requirement that the 

certifying physician must estimate how 

much longer skilled services will be 

needed as part of the recertification 

statement. In addition, in section III.G of 

this rule, consistent with section 51002 

of the BBA of 2018, we are proposing to 

align the regulations text at 42 CFR 

424.22(c) with current subregulatory 

guidance to allow medical record 

documentation from the HHA to be used 

to support the basis for certification 

and/or recertification of home health 

eligibility, if certain requirements are 

met. 

In section III.H. of this proposed rule, 

we propose to define ‘‘remote patient 

monitoring’’ under the Medicare home 

health benefit as the collection of 

physiologic data (for example, ECG, 

blood pressure, glucose monitoring) 

digitally stored and/or transmitted by 

the patient and/or caregiver to the HHA. 

Additionally in this section of the rule, 

we propose changes to the regulations at 

42 CFR 409.46 to include costs of 

remote patient monitoring as allowable 

administrative costs. 

2. Home Health Value Based Purchasing 

In section IV of this proposed rule, we 

are proposing changes to the Home 

Health Value Based Purchasing 

(HHVBP) Model implemented January 

1, 2016. We are proposing, beginning 

with performance year (PY) 4, to: 

Remove two Outcome and Assessment 

Information Set (OASIS) based 

measures, Influenza Immunization 

Received for Current Flu Season and 

Pneumococcal Polysaccharide Vaccine 

Ever Received, from the set of 

applicable measures; replace three 

OASIS-based measures (Improvement in 

Ambulation-Locomotion, Improvement 

in Bed Transferring, and Improvement 

in Bathing) with two proposed 

composite measures on total normalized 

composite change in self-care and 

mobility; change how we calculate the 

Total Performance Scores by changing 

the weighting methodology for the 

OASIS-based, claims-based, and 

HHCAHPS measures; and change the 

scoring methodology by reducing the 

maximum amount of improvement 

points an HHA could earn, from 10 

points to 9 points. While we are not 

making a specific proposal at this time, 

we are also providing an update on the 

progress towards developing public 

reporting of performance under the 

HHVBP Model and seeking comment on 

what information should be made 

publicly available. 

3. Home Health Quality Reporting 

Program 

In section V. of this proposed rule, we 

are proposing to update our policy for 

removing previously adopted Home 

Health (HH) Quality Reporting Program 

(QRP) measures and to adopt eight 

measure removal factors to align with 

other QRPs, to remove seven measures 

beginning with the CY 2021 HH QRP, 

and to update our regulations to clarify 

that not all OASIS data is required for 

the HH QRP. We are also providing an 

update on the implementation of certain 

provisions of the IMPACT Act, and a 

discussion of accounting for social risk 

factors in the HH QRP. Finally, we are 

proposing to increase the number of 

years of data used to calculate the 

Medicare Spending per Beneficiary 

measure for purposes of display from 1 

year to 2 years. 

4. Home Infusion Therapy 

In section VI.A. of this proposed rule, 

we discuss general background of home 

infusion therapy services and how that 

will relate to the implementation of the 

new home infusion benefit. In section 

VI.B. of this proposed rule, we are 

proposing to add a new subpart I under 

the regulations at 42 CFR part 486 to 

incorporate health and safety 

requirements for home infusion therapy 

suppliers. The proposed regulations 

would provide a framework for CMS to 

approve home infusion therapy 

accreditation organizations. Proposed 

subpart I would include General 

Provisions (Scope and Purpose, and 

Definitions) and Standards for Home 

Infusion Therapy (Plan of Care and 

Required Services). In section VI.C. of 

this proposed rule, we include 

information on temporary transitional 

payments for home infusion therapy 

services for CYs 2019 and 2020 as 

mandated by section 50401 of the BBA 

of 2018, and solicits comments on the 

proposed regulatory definition of 

‘‘Infusion Drug Administration Calendar 

Day’’. Also in section VI.C. of this 

proposed rule, we solicit comments 

regarding payment for home infusion 

therapy services for CY 2021 and 

subsequent years as required by section 

5012(d) of the 21st Century Cures Act. 

In section VI.D. of this proposed rule, 

we discuss the requirements set forth in 

section 1861(iii)(3)(D)(III) of the Act, 

which mandates that suppliers of home 

infusion therapy receive accreditation 

from a CMS-approved Accrediting 

Organization (AO) in order to receive 

Medicare payment. The Secretary must 

designate AOs to accredit suppliers 

furnishing Home Infusion therapy (HIT) 

not later than January 1, 2021. Qualified 


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HIT suppliers are required to receive 

accreditation before receiving Medicare 

payment for services provided to 

Medicare beneficiaries. 

At this time, no regulations exist to 

address the following elements of CMS’ 

approval and oversight of the AOs that 

accredit suppliers of Home Infusion 

Therapy: (1) The required components 

to be included in a Home Infusion 

Therapy AO’s initial or renewal 

accreditation program application; (2) 

regulations related to CMS’ review and 

approval of the Home Infusion Therapy 

AOs application for approval of its 

accreditation program; and (3) the 

ongoing monitoring and oversight of 

CMS-approved Home Infusion Therapy 

AOs. Therefore in this rule, we propose 

to establish a set of regulations that will 

govern the CMS approval and oversight 

process for all HIT AOs. 

We also propose to modify the 

regulations for oversight for AOs that 

accredit any Medicare-certified 

providers and suppliers at 42 CFR 488.5 

by adding a requirement that the AOs 

must include a statement with their 

application acknowledging that all AO 

surveyors are required to complete the 

relevant program specific CMS online 

trainings initially, and thereafter, 

consistent with requirements 

established by CMS for state and federal 

surveyors. We would also add another 

requirement at § 488.5 that would 

require the AOs for Medicare certified 

providers and suppliers to provide a 

written statement with their application 

stating that if a fully accredited and 

facility deemed to be in good-standing 

provides written notification that they 

wish to voluntarily withdraw from the 

AO’s CMS-approved accreditation 

program, the AO must continue the 

facility’s current accreditation until the 

effective date of withdrawal identified 

by the facility or the expiration date of 

the term of accreditation, whichever 

comes first. 

C. Summary of Costs, Transfers, and 

Benefits 

TABLE 1—SUMMARY OF COSTS, TRANSFERS, AND BENEFITS

Provision 

description Costs and cost savings Transfers Benefits 

CY 2019 HH PPS Payment Rate 

Update.

....................................................... The overall economic impact of 

the HH PPS payment rate update is an estimated $400 million (2.1 percent) in increased 

payments to HHAs in CY 2019.

To ensure home health payments 

are consistent with statutory 

payment authority for CY 2019. 

CY 2019 Temporary Transitional 

Payments for Home Infusion 

Therapy Services.

....................................................... The overall economic impact of 

the temporary transitional payment for home infusion therapy 

services is an estimated $60 

million in increased payments 

to home infusion therapy suppliers in CY 2019.

To ensure temporary transitional 

payments for home infusion 

therapy are consistent with statutory authority for CY 2019. 

CY 2019 HHVBP Model ................ ....................................................... The overall economic impact of 

the HHVBP Model provision for 

CY 2018 through 2022 is an estimated $378 million in total 

savings from a reduction in unnecessary hospitalizations and 

SNF usage as a result of greater quality improvements in the 

HH industry (none of which is 

attributable to the changes proposed in this proposed rule). As 

for payments to HHAs, there 

are no aggregate increases or 

decreases expected to be applied to the HHAs competing in 

the model.

CY 2020 OASIS Changes ............. The overall economic impact of 

the HH QRP and the case-mix 

adjustment methodology 

changes is annual savings to 

HHAs of an estimated $60 million.

....................................................... A reduction in burden to HHAs of 

approximately 73 hours annually for a savings of approximately $5,150 annually per 

HHA. 

CY 2020 Case-Mix Adjustment 

Methodology Changes, Including 

a Change in the Unit of Service 

from 60 to 30 days.

....................................................... The overall economic impact of 

the proposed case-mix adjustment methodology changes, including a change in the unit of 

service from 60 to 30 days, for 

CY 2020 results in no estimated dollar impact to HHAs, 

as section 51001(a) of the BBA 

of 2018 requires such change 

to be implemented in a budgetneutral manner.

To ensure home health payments 

are consistent with statutory 

payment authority for CY 2020. 


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1Meaningful Measures web page: https://

www.cms.gov/Medicare/Quality-Initiatives-PatientAssessment-Instruments/QualityInitiativesGenInfo/ 

MMF/General-info-Sub-Page.html. 

2See Remarks by Administrator Seema Verma at 

the Health Care Payment Learning and Action 

Network (LAN) Fall Summit, as prepared for 

delivery on October 30, 2017 https://www.cms.gov/ 

Newsroom/MediaReleaseDatabase/Fact-sheets/ 

2017-Fact-Sheet-items/2017-10-30.html. 

TABLE 1—SUMMARY OF COSTS, TRANSFERS, AND BENEFITS—Continued 

Provision 

description Costs and cost savings Transfers Benefits 

Accreditation for Home Infusion 

Therapy suppliers.

....................................................... The cost related to an AO obtaining CMS approval of a home infusion therapy accreditation 

program is estimated to be 

$8,014.50 per each AO, for 

AOs that have previously submitted an accreditation application to CMS. The cost across 

the potential 6 home infusion 

therapy AOs would be $48,087.

The cost related to each home infusion therapy AO for obtaining 

CMS approval of a home infusion therapy accreditation program is estimated to be 

$12,453 per each AO, for AOs 

that have not previously submitted an accreditation application to CMS. The cost across 

the potential 6 home infusion 

therapy AOs would be $74,718.

We further estimate that each 

home infusion therapy AO 

would incur an estimated cost 

burden in the amount of 

$23,258 for compliance with the 

proposed home infusion therapy AO approval and oversight 

regulations at §§ 488.1010 

through 488.1050 (including the 

filing of an application). The 

cost across the 6 potential 

home infusion therapy AOs 

would be $139,548.

D. Improving Patient Outcomes and 

Reducing Burden Through Meaningful 

Measures 

Regulatory reform and reducing 

regulatory burden are high priorities for 

us. To reduce the regulatory burden on 

the healthcare industry, lower health 

care costs, and enhance patient care, in 

October 2017, we launched the 

Meaningful Measures Initiative.1 This 

initiative is one component of our 

agency-wide Patients Over Paperwork 

Initiative 2 which is aimed at evaluating 

and streamlining regulations with a goal 

to reduce unnecessary cost and burden, 

increase efficiencies, and improve 

beneficiary experience. The Meaningful 

Measures Initiative is aimed at 

identifying the highest priority areas for 

quality measurement and quality 

improvement in order to assess the core 

quality of care issues that are most vital 

to advancing our work to improve 

patient outcomes. The Meaningful 

Measures Initiative represents a new 

approach to quality measures that 

fosters operational efficiencies, and will 

reduce costs including, the collection 

and reporting burden while producing 

quality measurement that is more 

focused on meaningful outcomes. 

The Meaningful Measures Framework 

has the following objectives: 

• Address high-impact measure areas 

that safeguard public health; 

• Patient-centered and meaningful to 

patients; 

• Outcome-based where possible; 

• Fulfill each program’s statutory 

requirements; 

• Minimize the level of burden for 

health care providers (for example, 

through a preference for EHR-based 

measures where possible, such as 

electronic clinical quality measures); 

• Provide significant opportunity for 

improvement; 

• Address measure needs for 

population based payment through 

alternative payment models; and 

• Align across programs and/or with 

other payers. 

In order to achieve these objectives, 

we have identified 19 Meaningful 

Measures areas and mapped them to six 

overarching quality priorities as shown 

in Table 2: 

TABLE 2—MEANINGFUL MEASURES FRAMEWORK DOMAINS AND MEASURE AREAS

Quality priority Meaningful measure area 

Making Care Safer by Reducing Harm Caused in the Delivery of Care Healthcare-Associated Infections. 

Preventable Healthcare Harm. 


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TABLE 2—MEANINGFUL MEASURES FRAMEWORK DOMAINS AND MEASURE AREAS—Continued 

Quality priority Meaningful measure area 

Strengthen Person and Family Engagement as Partners in Their Care Care is Personalized and Aligned with Patient’s Goals. 

End of Life Care according to Preferences. 

Patient’s Experience of Care. 

Patient Reported Functional Outcomes. 

Promote Effective Communication and Coordination of Care ................. Medication Management. 

Admissions and Readmissions to Hospitals. 

Transfer of Health Information and Interoperability. 

Promote Effective Prevention and Treatment of Chronic Disease .......... Preventive Care. 

Management of Chronic Conditions. 

Prevention, Treatment, and Management of Mental Health. 

Prevention and Treatment of Opioid and Substance Use Disorders. 

Risk Adjusted Mortality. 

Work with Communities to Promote Best Practices of Healthy Living .... Equity of Care. 

Community Engagement. 

Make Care Affordable .............................................................................. Appropriate Use of Healthcare. 

Patient-focused Episode of Care. 

Risk Adjusted Total Cost of Care. 

By including Meaningful Measures in 

our programs, we believe that we can 

also address the following cross-cutting 

measure criteria: 

• Eliminating disparities; 

• Tracking measurable outcomes and 

impact; 

• Safeguarding public health; 

• Achieving cost savings; 

• Improving access for rural 

communities; and 

• Reducing burden. 

We believe that the Meaningful 

Measures Initiative will improve 

outcomes for patients, their families, 

and health care providers while 

reducing burden and costs for clinicians 

and providers and promoting 

operational efficiencies. 

II. Background 

A. Statutory Background 

1. Home Health Prospective Payment 

System 

a. Background 

The Balanced Budget Act of 1997 

(BBA) (Pub. L. 105–33, enacted August 

5, 1997), significantly changed the way 

Medicare pays for Medicare home 

health services. Section 4603 of the BBA 

mandated the development of the HH 

PPS. Until the implementation of the 

HH PPS on October 1, 2000, HHAs 

received payment under a retrospective 

reimbursement system. 

Section 4603(a) of the BBA mandated 

the development of a HH PPS for all 

Medicare-covered home health services 

provided under a plan of care (POC) that 

were paid on a reasonable cost basis by 

adding section 1895 of the Act, entitled 

‘‘Prospective Payment For Home Health 

Services.’’ Section 1895(b)(1) of the Act 

requires the Secretary to establish a HH 

PPS for all costs of home health services 

paid under Medicare. Section 1895(b)(2) 

of the Act requires that, in defining a 

prospective payment amount, the 

Secretary will consider an appropriate 

unit of service and the number, type, 

and duration of visits provided within 

that unit, potential changes in the mix 

of services provided within that unit 

and their cost, and a general system 

design that provides for continued 

access to quality services. 

Section 1895(b)(3)(A) of the Act 

requires the following: (1) The 

computation of a standard prospective 

payment amount that includes all costs 

for HH services covered and paid for on 

a reasonable cost basis, and that such 

amounts be initially based on the most 

recent audited cost report data available 

to the Secretary (as of the effective date 

of the 2000 final rule), and (2) the 

standardized prospective payment 

amount be adjusted to account for the 

effects of case-mix and wage levels 

among HHAs. 

Section 1895(b)(3)(B) of the Act 

requires the standard prospective 

payment amounts be annually updated 

by the home health applicable 

percentage increase. Section 1895(b)(4) 

of the Act governs the payment 

computation. Sections 1895(b)(4)(A)(i) 

and (b)(4)(A)(ii) of the Act require the 

standard prospective payment amount 

to be adjusted for case-mix and 

geographic differences in wage levels. 

Section 1895(b)(4)(B) of the Act requires 

the establishment of an appropriate 

case-mix change adjustment factor for 

significant variation in costs among 

different units of services. 

Similarly, section 1895(b)(4)(C) of the 

Act requires the establishment of wage 

adjustment factors that reflect the 

relative level of wages, and wage-related 

costs applicable to home health services 

furnished in a geographic area 

compared to the applicable national 

average level. Under section 

1895(b)(4)(C) of the Act, the wageadjustment factors used by the Secretary 

may be the factors used under section 

1886(d)(3)(E) of the Act. 

Section 1895(b)(5) of the Act gives the 

Secretary the option to make additions 

or adjustments to the payment amount 

otherwise paid in the case of outliers 

due to unusual variations in the type or 

amount of medically necessary care. 

Section 3131(b)(2) of the Affordable 

Care Act revised section 1895(b)(5) of 

the Act so that total outlier payments in 

a given year would not exceed 2.5 

percent of total payments projected or 

estimated. The provision also made 

permanent a 10 percent agency-level 

outlier payment cap. 

In accordance with the statute, as 

amended by the BBA, we published a 

final rule in the July 3, 2000 Federal 

Register (65 FR 41128) to implement the 

HH PPS legislation. The July 2000 final 

rule established requirements for the 

new HH PPS for home health services 

as required by section 4603 of the BBA, 

as subsequently amended by section 

5101 of the Omnibus Consolidated and 

Emergency Supplemental 

Appropriations Act for Fiscal Year 1999 

(OCESAA), (Pub. L. 105–277, enacted 

October 21, 1998); and by sections 302, 

305, and 306 of the Medicare, Medicaid, 

and SCHIP Balanced Budget Refinement 

Act of 1999, (BBRA) (Pub. L. 106–113, 

enacted November 29, 1999). The 

requirements include the 

implementation of a HH PPS for home 

health services, consolidated billing 

requirements, and a number of other 

related changes. The HH PPS described 

in that rule replaced the retrospective 

reasonable cost-based system that was 

used by Medicare for the payment of 

home health services under Part A and 

Part B. For a complete and full 


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description of the HH PPS as required 

by the BBA, see the July 2000 HH PPS 

final rule (65 FR 41128 through 41214). 

Section 5201(c) of the Deficit 

Reduction Act of 2005 (DRA) (Pub. L. 

109–171, enacted February 8, 2006) 

added new section 1895(b)(3)(B)(v) to 

the Act, requiring HHAs to submit data 

for purposes of measuring health care 

quality, and linking the quality data 

submission to the annual applicable 

payment percentage increase. This data 

submission requirement is applicable 

for CY 2007 and each subsequent year. 

If an HHA does not submit quality data, 

the home health market basket 

percentage increase is reduced by 2 

percentage points. In the November 9, 

2006 Federal Register (71 FR 65884, 

65935), we published a final rule to 

implement the pay-for-reporting 

requirement of the DRA, which was 

codified at § 484.225(h) and (i) in 

accordance with the statute. The payfor-reporting requirement was 

implemented on January 1, 2007. 

The Affordable Care Act made 

additional changes to the HH PPS. One 

of the changes in section 3131 of the 

Affordable Care Act is the amendment 

to section 421(a) of the Medicare 

Prescription Drug, Improvement, and 

Modernization Act of 2003 (MMA) (Pub. 

L. 108–173, enacted on December 8, 

2003) as amended by section 5201(b) of 

the DRA. Section 421(a) of the MMA, as 

amended by section 3131 of the 

Affordable Care Act, requires that the 

Secretary increase, by 3 percent, the 

payment amount otherwise made under 

section 1895 of the Act, for HH services 

furnished in a rural area (as defined in 

section 1886(d)(2)(D) of the Act) with 

respect to episodes and visits ending on 

or after April 1, 2010, and before 

January 1, 2016. 

Section 210 of the Medicare Access 

and CHIP Reauthorization Act of 2015 

(Pub. L. 114–10) (MACRA) amended 

section 421(a) of the MMA to extend the 

3 percent rural add-on payment for 

home health services provided in a rural 

area (as defined in section 1886(d)(2)(D) 

of the Act) through January 1, 2018. In 

addition, section 411(d) of MACRA 

amended section 1895(b)(3)(B) of the 

Act such that CY 2018 home health 

payments be updated by a 1 percent 

market basket increase. This year, 

section 50208(a)(1) of the BBA of 2018 

again extended the rural add-on through 

the end of 2018. In addition, this section 

of the BBA of 2018 made some 

important changes to the rural add-on 

for CYs 2019 through 2022, to be 

discussed below. 

b. Current System for Payment of Home 

Health Services 

Generally, Medicare currently makes 

payment under the HH PPS on the basis 

of a national, standardized 60-day 

episode payment rate that is adjusted for 

the applicable case-mix and wage index. 

The national, standardized 60-day 

episode rate includes the six home 

health disciplines (skilled nursing, 

home health aide, physical therapy, 

speech-language pathology, 

occupational therapy, and medical 

social services). Payment for nonroutine supplies (NRS) is not part of the 

national, standardized 60-day episode 

rate, but is computed by multiplying the 

relative weight for a particular NRS 

severity level by the NRS conversion 

factor. Payment for durable medical 

equipment covered under the HH 

benefit is made outside the HH PPS 

payment system. To adjust for case-mix, 

the HH PPS uses a 153-category casemix classification system to assign 

patients to a home health resource 

group (HHRG). The clinical severity 

level, functional severity level, and 

service utilization are computed from 

responses to selected data elements in 

the OASIS assessment instrument and 

are used to place the patient in a 

particular HHRG. Each HHRG has an 

associated case-mix weight which is 

used in calculating the payment for an 

episode. Therapy service use is 

measured by the number of therapy 

visits provided during the episode and 

can be categorized into nine visit level 

categories (or thresholds): 0 to 5; 6; 7 to 

9; 10; 11 to 13; 14 to 15; 16 to 17; 18 

to 19; and 20 or more visits. 

For episodes with four or fewer visits, 

Medicare pays national per-visit rates 

based on the discipline(s) providing the 

services. An episode consisting of four 

or fewer visits within a 60-day period 

receives what is referred to as a lowutilization payment adjustment (LUPA). 

Medicare also adjusts the national 

standardized 60-day episode payment 

rate for certain intervening events that 

are subject to a partial episode payment 

adjustment (PEP adjustment). For 

certain cases that exceed a specific cost 

threshold, an outlier adjustment may 

also be available. 

c. Updates to the Home Health 

Prospective Payment System 

As required by section 1895(b)(3)(B) 

of the Act, we have historically updated 

the HH PPS rates annually in the 

Federal Register. The August 29, 2007 

final rule with comment period set forth 

an update to the 60-day national 

episode rates and the national per-visit 

rates under the HH PPS for CY 2008. 

The CY 2008 HH PPS final rule 

included an analysis performed on CY 

2005 home health claims data, which 

indicated a 12.78 percent increase in the 

observed case-mix since 2000. Case-mix 

represents the variations in conditions 

of the patient population served by the 

HHAs. Subsequently, a more detailed 

analysis was performed on the 2005 

case-mix data to evaluate if any portion 

of the 12.78 percent increase was 

associated with a change in the actual 

clinical condition of home health 

patients. We identified 8.03 percent of 

the total case-mix change as real, and 

therefore, decreased the 12.78 percent of 

total case-mix change by 8.03 percent to 

get a final nominal case-mix increase 

measure of 11.75 percent (0.1278 * 

(1¥0.0803) = 0.1175). 

To account for the changes in casemix that were not related to an 

underlying change in patient health 

status, we implemented a reduction, 

over 4 years, to the national, 

standardized 60-day episode payment 

rates. That reduction was to be 2.75 

percent per year for 3 years beginning in 

CY 2008 and 2.71 percent for the fourth 

year in CY 2011. In the CY 2011 HH PPS 

final rule (76 FR 68532), we updated our 

analyses of case-mix change and 

finalized a reduction of 3.79 percent, 

instead of 2.71 percent, for CY 2011 and 

deferred finalizing a payment reduction 

for CY 2012 until further study of the 

case-mix change data and methodology 

was completed. 

In the CY 2012 HH PPS final rule (76 

FR 68526), we updated the 60-day 

national episode rates and the national 

per-visit rates. In addition, as discussed 

in the CY 2012 HH PPS final rule (76 

FR 68528), our analysis indicated that 

there was a 22.59 percent increase in 

overall case-mix from 2000 to 2009 and 

that only 15.76 percent of that overall 

observed case-mix percentage increase 

was due to real case-mix change. As a 

result of our analysis, we identified a 

19.03 percent nominal increase in casemix. At that time, to fully account for 

the 19.03 percent nominal case-mix 

growth identified from 2000 to 2009, we 

finalized a 3.79 percent payment 

reduction in CY 2012 and a 1.32 percent 

payment reduction for CY 2013. 

In the CY 2013 HH PPS final rule (77 

FR 67078), we implemented the 1.32 

percent reduction to the payment rates 

for CY 2013 finalized the previous year, 

to account for nominal case-mix growth 

from 2000 through 2010. When taking 

into account the total measure of casemix change (23.90 percent) and the 

15.97 percent of total case-mix change 

estimated as real from 2000 to 2010, we 

obtained a final nominal case-mix 

change measure of 20.08 percent from 


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3Bhole, M.V., Burton, J., & Chapel, H.M., (2008). 

Self-infusion programs for immunoglobulin 

replacement at home: Feasibility, safety and 

efficacy. Immunology and Allergy Clinics of North 

America, 28(4), 821–832. doi:10.1016/j.iac.2008.06.

005. 

Souayah, N., Hasan, A., Khan, H., et al. (2011). 

The safety profile of home infusion of intravenous 

immunoglobulin in patients with 

neuroimmunologic disorders. Journal of Clinical 

Neuromuscular Disease, 12(supp 4), S1–10. doi: 

10.1097/CND.0b013e3182212589. 

2000 to 2010 (0.2390 * (1 ¥ 0.1597) = 

0.2008). To fully account for the 

remainder of the 20.08 percent increase 

in nominal case-mix beyond that which 

was accounted for in previous payment 

reductions, we estimated that the 

percentage reduction to the national, 

standardized 60-day episode rates for 

nominal case-mix change would be 2.18 

percent. Although we considered 

proposing a 2.18 percent reduction to 

account for the remaining increase in 

measured nominal case-mix, we 

finalized the 1.32 percent payment 

reduction to the national, standardized 

60-day episode rates in the CY 2012 HH 

PPS final rule (76 FR 68532). Section 

3131(a) of the Affordable Care Act 

added new section 1895(b)(3)(A)(iii) to 

the Act, which required that, beginning 

in CY 2014, we apply an adjustment to 

the national, standardized 60-day 

episode rate and other amounts that 

reflect factors such as changes in the 

number of visits in an episode, the mix 

of services in an episode, the level of 

intensity of services in an episode, the 

average cost of providing care per 

episode, and other relevant factors. 

Additionally, we were required to phase 

in any adjustment over a 4-year period 

in equal increments, not to exceed 3.5 

percent of the payment amount (or 

amounts) as of the date of enactment of 

the Affordable Care Act in 2010, and 

fully implement the rebasing 

adjustments by CY 2017. Therefore, in 

the CY 2014 HH PPS final rule (78 FR 

72256) for each year, CY 2014 through 

CY 2017, we finalized a fixed-dollar 

reduction to the national, standardized 

60-day episode payment rate of $80.95 

per year, increases to the national pervisit payment rates per year, and a 

decrease to the NRS conversion factor of 

2.82 percent per year. We also finalized 

three separate LUPA add-on factors for 

skilled nursing, physical therapy, and 

speech-language pathology and removed 

170 diagnosis codes from assignment to 

diagnosis groups in the HH PPS 

Grouper. In the CY 2015 HH PPS final 

rule (79 FR 66032), we implemented the 

second year of the 4-year phase-in of the 

rebasing adjustments to the HH PPS 

payment rates and made changes to the 

HH PPS case-mix weights. In addition, 

we simplified the face-to-face encounter 

regulatory requirements and the therapy 

reassessment timeframes. 

In the CY 2016 HH PPS final rule (80 

FR 68624), we implemented the third 

year of the 4-year phase-in of the 

rebasing adjustments to the national, 

standardized 60-day episode payment 

amount, the national per-visit rates and 

the NRS conversion factor (as discussed 

previously). In the CY 2016 HH PPS 

final rule, we also recalibrated the HH 

PPS case-mix weights, using the most 

current cost and utilization data 

available, in a budget-neutral manner 

and finalized reductions to the national, 

standardized 60-day episode payment 

rate in CY 2016, CY 2017, and CY 2018 

of 0.97 percent in each year to account 

for estimated case-mix growth unrelated 

to increases in patient acuity (that is, 

nominal case-mix growth) between CY 

2012 and CY 2014. Finally, section 

421(a) of the MMA, as amended by 

section 210 of the MACRA, extended 

the payment increase of 3 percent for 

HH services provided in rural areas (as 

defined in section 1886(d)(2)(D) of the 

Act) to episodes or visits ending before 

January 1, 2018. 

In the CY 2017 HH PPS final rule (81 

FR 76702), we implemented the last 

year of the 4-year phase-in of the 

rebasing adjustments to the national, 

standardized 60-day episode payment 

amount, the national per-visit rates and 

the NRS conversion factor (as outlined 

previously). We also finalized changes 

to the methodology used to calculate 

outlier payments under the authority of 

section 1895(b)(5) of the Act. Lastly, in 

accordance with section 1834(s) of the 

Act, as added by section 504(a) of the 

Consolidated Appropriations Act, 2016 

(Pub. L. 114–113, enacted December 18, 

2015), we implemented changes in 

payment for furnishing Negative 

Pressure Wound Therapy (NPWT) using 

a disposable device for patients under a 

home health plan of care for which 

payment would otherwise be made 

under section 1895(b) of the Act. 

2. Home Infusion Therapy 

Section 5012 of the 21st Century 

Cures Act (‘‘the Cures Act’’) (Pub. L. 

114–255), which amended sections 

1861(s)(2) and 1861(iii) of the Act, 

established a new Medicare home 

infusion therapy benefit. The Medicare 

home infusion therapy benefit covers 

the professional services including 

nursing services furnished in 

accordance with the plan of care, 

patient training and education (not 

otherwise covered under the durable 

medical equipment benefit), remote 

monitoring, and monitoring services for 

the provision of home infusion therapy 

and home infusion drugs furnished by 

a qualified home infusion therapy 

supplier. This benefit will ensure 

consistency in coverage for home 

infusion benefits for all Medicare 

beneficiaries. Section 50401 of the BBA 

of 2018 amended section 1834(u) of the 

Act by adding a new paragraph (7) that 

establishes a home infusion therapy 

services temporary transitional payment 

for eligible home infusion suppliers for 

certain items and services furnished in 

coordination with the furnishing of 

transitional home infusion drugs 

beginning January 1, 2019. This 

temporary payment covers the cost of 

the same items and services, as defined 

in section 1861(iii)(2)(A) and (B) of the 

Act, related to the administration of 

home infusion drugs. The temporary 

transitional payment would begin on 

January 1, 2019 and end the day before 

the full implementation of the home 

infusion therapy benefit on January 1, 

2021, as required by section 5012 of the 

21st Century Cures Act. 

Home infusion therapy is a treatment 

option for patients with a wide range of 

acute and chronic conditions, ranging 

from bacterial infections to more 

complex conditions such as late-stage 

heart failure and immune deficiencies. 

Home infusion therapy affords a patient 

independence and better quality of life, 

because it is provided in the comfort of 

the patient’s home at a time that best fits 

his or her needs. This is significant, 

because generally patients can return to 

their daily activities after they receive 

their infusion treatments and, in many 

cases, they can continue their activities 

while receiving their treatments. In 

addition, home infusion therapy can 

provide improved safety and better 

outcomes. The home has been shown to 

be a safe setting for patients to receive 

infusion therapy.3 Additionally, 

patients receiving treatment outside of 

the hospital setting may be at lower risk 

of hospital-acquired infections, which 

can be more difficult to treat because of 

multi-drug resistance than those that are 

community-acquired. This is 

particularly important for vulnerable 

patients such as those who are 

immunocompromised, as hospitalacquired infections are increasingly 

caused by antibiotic-resistant pathogens. 

Infusion therapy typically means that 

a drug is administered intravenously, 

but the term may also refer to situations 

where drugs are provided through other 

non-oral routes, such as intramuscular 

injections and epidural routes (into the 

membranes surrounding the spinal 

cord). Diseases that may require 

infusion therapy include infections that 

are unresponsive to oral antibiotics, 

cancer and cancer-related pain, 


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4https://www.gao.gov/assets/310/305261.pdf. 

dehydration, and gastrointestinal 

diseases or disorders which prevent 

normal functioning of the 

gastrointestinal system. Other 

conditions treated with specialty 

infusion therapies may include some 

forms of cancers, congestive heart 

failure, Crohn’s Disease, hemophilia, 

hepatitis, immune deficiencies, multiple 

sclerosis and rheumatoid arthritis. 

Infusion therapy originates with a 

prescription order from a physician or 

another qualified prescriber who is 

overseeing the care of the patient. The 

prescription order is sent to a home 

infusion therapy supplier, which is a 

state-licensed pharmacy, physician, or 

other provider of services or suppliers 

licensed by the state. 

A 2010 Government Accountability 

Office (GAO) report (10–426) found that 

most health insurers rely on 

credentialing, accreditation, or both to 

help ensure that plan members receive 

quality home infusion services from 

their network suppliers.4 Home infusion 

AOs conduct on-site surveys to evaluate 

all components of the service, including 

medical equipment, nursing, and 

pharmacy. Accreditation standards can 

include such requirements as the CMS 

Conditions of Participation for home 

health services, other Federal 

government regulations, and industry 

best practices. All of the accreditation 

standards evaluate a range of provider 

competencies, such as having a 

complete plan of care, response to 

adverse events, and implementation of a 

quality improvement plan. 

Sections 1861(iii)(3)(D)(III) and 

1834(u)(5) of the Act, as amended by 

section 5012 of the Cures Act requires 

that, in order to participate in Medicare, 

home infusion therapy suppliers must 

select a CMS-approved AO and undergo 

an accreditation review process to 

demonstrate that the home infusion 

therapy program meets the accreditation 

organization’s standards. Section 

1861(iii) of the Act, as amended by 

section 5012 of the Cures Act, sets forth 

standards in three areas: (1) Ensuring 

that all patients have a plan of care 

established and updated by a physician 

that sets out the care and prescribed 

infusion therapy necessary to meet the 

patient-specific needs, (2) having 

procedures to ensure that remote 

monitoring services associated with 

administering infusion drugs in a 

patient’s home are provided, and (3) 

having procedures to ensure that 

patients receive education and training 

on the effective use of medications and 

equipment in the home. 

D. Advancing Health Information 

Exchange 

The Department of Health and Human 

Services (HHS) has a number of 

initiatives designed to encourage and 

support the adoption of interoperable 

health information technology and to 

promote nationwide health information 

exchange to improve health care. The 

Office of the National Coordinator for 

Health Information Technology (ONC) 

and CMS work collaboratively to 

advance interoperability across settings 

of care, including post-acute care. 

The Improving Medicare Post-Acute 

Care Transformation Act of 2014 (Pub. 

L. 113–185) (IMPACT Act) requires 

assessment data to be standardized and 

interoperable to allow for exchange of 

the data among post-acute providers and 

other providers. To further 

interoperability in post-acute care, CMS 

is developing a Data Element Library to 

serve as a publically available 

centralized, authoritative resource for 

standardized data elements and their 

associated mappings to health IT 

standards. These interoperable data 

elements can reduce provider burden by 

allowing the use and reuse of healthcare 

data, support provider exchange of 

electronic health information for care 

coordination, person-centered care, and 

support real-time, data driven, clinical 

decision making. Once available, 

standards in the Data Element Library 

can be referenced on the CMS website 

and in the ONC Interoperability 

Standards Advisory (ISA). 

The 2018 Interoperability Standards 

Advisory (ISA) is available at: https://

www.healthit.gov/standards-advisory. 

Most recently, the 21st Century Cures 

Act (Pub. L. 114–255), enacted in 2016, 

requires HHS to take new steps to 

enable the electronic sharing of health 

information ensuring interoperability 

for providers and settings across the 

care continuum. Specifically, Congress 

directed ONC to ‘‘develop or support a 

trusted exchange framework, including 

a common agreement among health 

information networks nationally.’’ This 

framework (https://beta.healthit.gov/ 

topic/interoperability/trusted-exchangeframework-and-common-agreement) 

outlines a common set of principles for 

trusted exchange and minimum terms 

and conditions for trusted exchange in 

order to enable interoperability across 

disparate health information networks. 

In another important provision, 

Congress defined ‘‘information 

blocking’’ as practices likely to interfere 

with, prevent, or materially discourage 

access, exchange, or use of electronic 

health information, and established new 

authority for HHS to discourage these 

practices. We invite providers to learn 

more about these important 

developments and how they are likely 

to affect HHAs. 

III. Proposed Provisions for Payment 

Under the Home Health Prospective 

Payment System (HH PPS) 

A. Monitoring for Potential Impacts— 

Affordable Care Act Rebasing 

Adjustments 

1. Analysis of FY 2016 HHA Cost Report 

Data 

As part of our efforts in monitoring 

the potential impacts of the rebasing 

adjustments finalized in the CY 2014 

HH PPS final rule (78 FR 72293), we 

continue to update our analysis of home 

health cost report and claims data. 

Previous years’ cost report and claims 

data analyses and results can be found 

in the CY 2018 HH PPS proposed rule 

(82 FR 35277–35278). For this proposed 

rule, we analyzed the 2016 HHA cost 

report data (the most recent, complete 

data available at the time of this 

proposed rule) and 2016 HHA claims 

data to obtain the average number of 

visits per episode that match to the year 

of cost report data analyzed. To 

determine the 2016 average cost per 

visit per discipline, we applied the same 

trimming methodology outlined in the 

CY 2014 HH PPS proposed rule (78 FR 

40284) and weighted the costs per visit 

from the 2016 cost reports by size, 

facility type, and urban/rural location so 

the costs per visit were nationally 

representative according to 2016 claims 

data. The 2016 average number of visits 

was taken from 2016 claims data. We 

estimated the cost of a 60-day episode 

in CY 2016 to be $2,538.54 using 2016 

cost report data (Table 2). However, the 

national, standardized 60-day episode 

payment amount in CY 2016 was 

$2,965.12. The difference between the 

60-day episode payment rate and 

average cost per episode of care for CY 

2016 was 16.8 percent. 


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TABLE 2—2016 ESTIMATED COST PER EPISODE

Discipline 2016 Average 

costs per visit 

2016 Average 

NRS costs per 

visit 

2016 Average 

cost + NRS 

per visit 

2016 Average 

number of 

visits 

2016 60-Day 

episode costs 

Skilled Nursing ..................................................................... $132.83 $3.41 $136.24 8.81 $1,200.27 

Physical Therapy ................................................................. 156.04 3.41 159.45 5.58 889.73 

Occupational Therapy .......................................................... 153.53 3.41 156.94 1.56 244.83 

Speech Pathology ................................................................ 170.06 3.41 173.47 0.32 55.51 

Medical Social Services ....................................................... 219.73 3.41 223.14 0.14 31.24 

Home Health Aides .............................................................. 60.50 3.41 63.91 1.83 116.96 

Total .............................................................................. ........................ ........................ ........................ 18.24 2,538.54 

Source: Medicare cost reports pulled in March 2018 and Medicare claims data from 2015 and 2016 for episodes (excluding low-utilization payment adjusted episodes and partial-episode-payment adjusted episodes), linked to OASIS assessments for episodes ending in CY 2016. 

2. Analysis of CY 2017 HHA Claims 

Data 

In the CY 2014 HH PPS final rule (78 

FR 72256), some commenters expressed 

concern that the rebasing of the HH PPS 

payment rates would result in HHA 

closures and would therefore diminish 

access to home health services. In 

addition to examining more recent cost 

report data, for this proposed rule we 

examined home health claims data from 

all four years during which rebasing 

adjustments were made (CY 2014, CY 

2015, CY 2016, and CY 2017), the first 

calendar year of the HH PPS (CY 2001), 

and claims data for the year prior to the 

implementation of the rebasing 

adjustments (CY 2013). Preliminary 

analysis of CY 2017 home health claims 

data indicates that the number of 

episodes decreased by 5.3 percent and 

the number of home health users that 

received at least one episode of care 

decreased by 3.2 percent from 2016 to 

2017, while the number of FFS 

beneficiaries decreased 0.1 percent from 

2016 to 2017. Between 2013 and 2014 

there appears to be a net decrease in the 

number of HHAs billing Medicare for 

home health services of 1.6 percent, a 

continued decrease of 1.7 percent from 

2014 to 2015, a decrease of 3.4 percent 

from 2015 to 2016, and a decrease of 4.4 

percent from 2016 to 2017. We note that 

in CY 2016 there were 2.9 HHAs per 

10,000 FFS beneficiaries and 2.8 HHAs 

per 10,000 FFS beneficiaries in CY 

2017, which remains markedly higher 

than the 1.9 HHAs per 10,000 FFS 

beneficiaries close to the inception of 

the HH PPS in 2001 (the HH PPS was 

implemented on October 1, 2000). The 

number of home health users, as a 

percentage of FFS beneficiaries, has 

decreased from 9.0 percent in 2013 to 

8.4 percent in 2017. 

TABLE 3—HOME HEALTH STATISTICS, CY 2001 AND CY 2013 THROUGH CY 2017 

2001 2013 2014 2015 2016 2017 

Number of episodes ................................. 3,896,502 6,708,923 6,451,283 6,340,932 6,294,234 5,963,780 

Beneficiaries receiving at least 1 episode 

(Home Health Users) ........................... 2,412,318 3,484,579 3,381,635 3,365,512 3,350,174 3,242,346 

Part A and/or B FFS beneficiaries ........... 34,899,167 38,505,609 38,506,534 38,506,534 38,555,150 38,509,031 

Episodes per Part A and/or B FFS beneficiaries ................................................. 0.11 0.17 0.17 0.17 0.16 0.15 

Home health users as a percentage of 

Part A and/or B FFS beneficiaries ....... 6.9% 9.0% 8.8% 8.8% 8.7% 8.4% 

HHAs providing at least 1 episode .......... 6,511 11,889 11,693 11,381 11,102 10,612 

HHAs per 10,000 Part A and/or B FFS 

beneficiaries ......................................... 1.9 3.1 3.0 3.0 2.9 2.8 

Source: National claims history (NCH) data obtained from Chronic Condition Warehouse (CCW)—Accessed on May 14, 2014 and August 19, 

2014 for CY 2013 data; accessed on May 7, 2015 for CY 2001 and CY 2014 data; accessed on April 7, 2016 for CY 2015 data; accessed on 

March 20, 2017 for CY 2016 data; accessed on March 8, 2018 for CY 2017 data; and Medicare enrollment information obtained from the CCW 

Master Beneficiary Summary File. Beneficiaries are the total number of beneficiaries in a given year with at least 1 month of Part A and/or Part B 

Fee-for-Service coverage without having any months of Medicare Advantage coverage. 

Note(s): These results include all episode types (Normal, PEP, Outlier, LUPA) and also include episodes from outlying areas (outside of 50 

States and District of Columbia). Only episodes with a through date in the year specified are included. Episodes with a claim frequency code 

equal to ‘‘0’’ (‘‘Non-payment/zero claims’’) and ‘‘2’’ (‘‘Interim—first claim’’) are excluded. If a beneficiary is treated by providers from multiple 

states within a year the beneficiary is counted within each state’s unique number of beneficiaries served. 

In addition to examining home health 

claims data from all four years of the 

implementation of rebasing adjustments 

required by the Affordable Care Act, we 

examined trends in home health 

utilization for all years starting in CY 

2001 and up through CY 2017. Figure 1, 

displays the average number of visits 

per 60-day episode of care and the 

average payment per visit. While the 

average payment per visit has steadily 

increased from approximately $116 in 

CY 2001 to $170 for CY 2017, the 

average total number of visits per 60-day 

episode of care has declined, most 

notably between CY 2009 (21.7 visits 

per episode) and CY 2010 (19.8 visits 

per episode), which was the first year 

that the 10 percent agency-level cap on 

HHA outlier payments was 

implemented. The average of total visits 

per episode has steadily decreased from 

21.7 in 2009 to 17.9 in 2017. 

BILLING CODE 4120–01–P 


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5Report to Congress Medicare Home Health 

Study: An Investigation on Access to Care and 

Payment for Vulnerable Patient Populations (2014). 

Available at: https://www.cms.gov/Medicare/ 

Medicare-Fee-for-Service-Payment/ 

HomeHealthPPS/Downloads/HH-Report-toCongress.pdf. 

BILLING CODE 4120–01–C 

Figure 2 displays the average number 

of visits by discipline type for a 60-day 

episode of care and shows that while 

the number of therapy visits per 60-day 

episode of care has increased steadily, 

the number of skilled nursing and home 

health aide visits have decreased 

between CY 2009 and CY 2017. The 

results of the Report to Congress, 

‘‘Medicare Home Health Study: An 

Investigation on Access to Care and 

Payment for Vulnerable Patient 

Populations’’, required by section 

3131(d) of the Affordable Care Act, 

suggests that the current home health 

payment system may discourage HHAs 

from serving patients with clinically 

complex and/or poorly controlled 

chronic conditions who do not qualify 

for therapy but require a large number 

of skilled nursing visits.5 The home 

health study results seem to be 

consistent with the recent trend in the 

decreased number of visits per episode 

of care driven by decreases in skilled 

nursing and home health aide services 

evident in Figures 1 and 2. 


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As part of our monitoring efforts, we 

also examined the trends in episode 

timing and service use over time. 

Specifically, we examined the 

percentage of early episodes with 0 to 

19 therapy visits, late episodes with 0 to 

19 therapy visits, and episodes with 20+ 

therapy visits from CY 2008 to CY 2017. 

In CY 2008, we implemented 

refinements to the HH PPS case-mix 

system. As part of those refinements, we 

added additional therapy thresholds 

and differentiated between early and 

late episodes for those episodes with 

less than 20+ therapy visits. Early 

episodes are defined as the 1st or 2nd 

episode in a sequence of adjacent 

covered episodes. Late episodes are 

defined as the 3rd and subsequent 

episodes in a sequence of adjacent 

covered episodes. Table 4 shows that 

the percentage of early and late episodes 

from CY 2008 to CY 2017 has remained 

relatively stable over time. There has 

been a decrease in the percentage of 

early episodes with 0 to 19 therapy 

visits from 65.9 percent in CY 2008 to 

61.3 percent in CY 2017 and a slight 

increase in the percentage of late 

episodes with 0 to 19 therapy visits 

from 29.5 percent in CY 2008 to 31.2 

percent in CY 2017. In 2015, the casemix weights for the third and later 

episodes of care with 0 to 19 therapy 

visits decreased as a result of the CY 

2015 recalibration of the case-mix 

weights. Despite the decreases in the 

case-mix weights for the later episodes, 

the percentage of late episodes with 0 to 

19 therapy visits did not change 

substantially. However, episode timing 

is not a variable in the determination of 

the case-mix weights for those episodes 

with 20+ therapy visits and the 

percentage of episodes with 20+ therapy 

visits has increased from 4.6 percent in 

CY 2008 to 7.6 percent in CY 2017. 


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6Medicare Payment Advisory Commission 

(MedPAC). ‘‘Home Health Care Services.’’ Report to 

the Congress: Medicare Payment Policy. 

Washington, DC, March 2015. P. 214. Accessed on 

3/28/2017 at: http://www.medpac.gov/docs/defaultsource/reports/chapter-9-home-health-careservices-march-2015-report-.pdf?sfvrsn=0. 

TABLE 4—HOME HEALTH EPISODES BY EPISODE TIMING, CY 2008 THROUGH CY 2017 

Year All episodes 

Number of 

early episodes 

(excluding 

episodes with 

20+ visits) 

% of early 

episodes 

(excluding 

episodes with 

20+ visits) 

Number of 

late episodes 

(excluding 

episodes with 

20+ visits) 

% of late 

episodes 

(excluding 

episodes 

with 

20+ visits) 

Number of 

episodes with 

20+ visits 

% of episodes 

with 

20+ visits 

2008 ............................. 5,423,037 3,571,619 65.9 1,600,587 29.5 250,831 4.6 

2009 ............................. 6,530,200 3,701,652 56.7 2,456,308 37.6 372,240 5.7 

2010 ............................. 6,877,598 3,872,504 56.3 2,586,493 37.6 418,601 6.1 

2011 ............................. 6,857,885 3,912,982 57.1 2,564,859 37.4 380,044 5.5 

2012 ............................. 6,767,576 3,955,207 58.4 2,458,734 36.3 353,635 5.2 

2013 ............................. 6,733,146 4,023,486 59.8 2,347,420 34.9 362,240 5.4 

2014 ............................. 6,616,875 3,980,151 60.2 2,263,638 34.2 373,086 5.6 

2015 ............................. 6,644,922 4,008,279 60.3 2,205,052 33.2 431,591 6.5 

2016 ............................. 6,294,232 3,802,254 60.4 2,053,972 32.6 438,006 7.0 

2017 ............................. 5,963,778 3,655,636 61.3 1,857,840 31.2 450,302 7.6 

Source: National claims history (NCH) data obtained from Chronic Condition Warehouse (CCW)—Accessed on March 6, 2018. 

Note(s): Only episodes with a through date in the year specified are included. Episodes with a claim frequency code equal to ‘‘0’’ (‘‘Non-payment/zero claims’’) and ‘‘2’’ (‘‘Interim—first claim’’) are excluded. 

We also examined trends in 

admission source for home health 

episodes over time. Specifically, we 

examined the admission source for the 

‘‘first or only’’ episodes of care (first 

episodes in a sequence of adjacent 

episodes of care or the only episode of 

care) from CY 2008 through CY 2017 

(Figure 3). The percentage of first or 

only episodes with an acute admission 

source, defined as episodes with an 

inpatient hospital stay within the 14 

days prior to a home health episode, has 

decreased from 38.6 percent in CY 2008 

to 34.8 percent in CY 2017. The 

percentage of first or only episodes with 

a post-acute admission source, defined 

as episodes which had a stay at a skilled 

nursing facility (SNF), inpatient 

rehabilitation facility (IRF), or long term 

care hospital (LTCH) within 14 days 

prior to the home health episode, has 

slightly increased from 16.4 percent in 

CY 2008 to 17.6 percent in CY 2017. 

The percentage of first or only episodes 

with a community admission source, 

defined as episodes which did not have 

an acute or post-acute stay in the 14 

days prior to the home health episode, 

increased from 37.4 percent in CY 2008 

to 41.5 percent in CY 2017. Our findings 

on the trends in admission source show 

a similar pattern with MedPAC’s as 

outlined in their 2015 Report to the 

Congress.6 MedPAC concluded that 

there has been tremendous growth in 

the use of home health for patients 

residing in the community (that is, 

episodes not preceded by a prior 

hospitalization) and that these episodes 

have more than doubled since 2001. 

However, MedPAC examined admission 

source trends from 2002 up through 

2013 and included first and subsequent 

episodes of care, whereas CMS analysis, 

as described above, included ‘‘first or 

only’’ episodes of care. Nonetheless, 

both analyses show a trend of increasing 

episodes of care without a preceding 

inpatient stay. MedPAC suggests there is 

significant potential for overuse, 

particularly since Medicare does not 

currently require any cost sharing for 

home health care. 


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We will continue to monitor for 

potential impacts due to the rebasing 

adjustments required by section 3131(a) 

of the Affordable Care Act and other 

policy changes in the future. 

Independent effects of any one policy 

may be difficult to discern in years 

where multiple policy changes occur in 

any given year. 

B. Proposed CY 2019 HH PPS Case-Mix 

Weights 

In the CY 2015 HH PPS final rule (79 

FR 66072), we finalized a policy to 

annually recalibrate the HH PPS casemix weights—adjusting the weights 

relative to one another—using the most 

current, complete data available. To 

recalibrate the HH PPS case-mix weights 

for CY 2018, we will use the same 

methodology finalized in the CY 2008 

HH PPS final rule (72 FR 49762), the CY 

2012 HH PPS final rule (76 FR 68526), 

and the CY 2015 HH PPS final rule (79 

FR 66032). Annual recalibration of the 

HH PPS case-mix weights ensures that 

the case-mix weights reflect, as 

accurately as possible, current home 

health resource use and changes in 

utilization patterns. 

To generate the proposed CY 2019 HH 

PPS case-mix weights, we used CY 2017 

home health claims data (as of March 2, 

2018) with linked OASIS data. These 

data are the most current and complete 

data available at this time. We will use 

CY 2017 home health claims data (as of 

June 30, 2018 or later) with linked 

OASIS data to generate the CY 2019 HH 

PPS case-mix weights in the CY 2019 

HH PPS final rule. The process we used 

to calculate the HH PPS case-mix 

weights are outlined below. 

Step 1: Re-estimate the four-equation 

model to determine the clinical and 

functional points for an episode using 

wage-weighted minutes of care as our 

dependent variable for resource use. 

The wage-weighted minutes of care are 

determined using the CY 2016 Bureau of 

Labor Statistics national hourly wage 

plus fringe rates for the six home health 

disciplines and the minutes per visit 

from the claim. The points for each of 

the variables for each leg of the model, 

updated with CY 2017 home health 

claims data, are shown in Table 5. The 

points for the clinical variables are 

added together to determine an 

episode’s clinical score. The points for 

the functional variables are added 

together to determine an episode’s 

functional score. 

BILLING CODE 4120–01–P 


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TABLE 5: CASE-MIX ADJUSTMENT VARIABLES AND SCORES 

Episode number within sequence of adjacent episodes 1 or 2 1 or 2 3+ 3+ 

Therapy visits 0-13 14+ 0-13 14+ 

EQUATION: 1 2 3 4 

CLINICAL DIMENSION 

1 Primary or Other Diagnosis = Blindness/Low Vision 

2 Primary or Other Diagnosis = Blood disorders 2 

3 Primary or Other Diagnosis = Cancer, selected benign neoplasms 4 4 

4 Primary Diagnosis = Diabetes 2 2 

5 Other Diagnosis = Diabetes 

Primary or Other Diagnosis = Dysphagia 

6 AND 2 15 15 

Primary or Other Diagnosis= Neuro 3- Stroke 

Primary or Other Diagnosis = Dysphagia 

7 AND 5 5 

M1030 (Therapy at home)= 3 (Enteral) 

8 Primary or Other Diagnosis = Gastrointestinal disorders 1 2 

Primary or Other Diagnosis = Gastrointestinal disorders 

9 AND 5 

M1630 (ostomy)= 1 or 2 

Primary or Other Diagnosis = Gastrointestinal disorders 

AND 

10 Primary or Other Diagnosis = Neuro 1 -Brain disorders and paralysis, 

OR Neuro 2 - Peripheral neurological disorders, OR Neuro 3 - Stroke, 

OR Neuro 4- Multiple Sclerosis 

11 Primary or Other Diagnosis= Heart Disease OR Hypertension 2 3 2 

12 Primary Diagnosis = Neuro 1 -Brain disorders and paralysis 2 7 4 7 

Primary or Other Diagnosis = Neuro 1 -Brain disorders and paralysis 

13 AND 2 

M1840 (Toilet transfer)= 2 or more 

Primary or Other Diagnosis = Neuro 1 -Brain disorders and paralysis 

14 OR Neuro 2 - Peripheral neurological disorders 3 5 2 3 AND 

M1810 or M1820 (Dressing upper or lower body)= 1, 2, or 3 

15 Primary or Other Diagnosis= Neuro 3- Stroke 3 6 2 

Primary or Other Diagnosis= Neuro 3- Stroke 

16 AND 3 

Ml810 or Ml820 (Dressing upper or lower body)= 1, 2, or 3 

Primary or Other Diagnosis= Neuro 3- Stroke 

17 AND 

M1860 (Ambulation) = 4 or more 

Primary or Other Diagnosis= Neuro 4 -Multiple Sclerosis AND AT 

LEAST ONE OF THE FOLLOWING: 

M1830 (Bathing)= 2 or more 

18 OR 2 7 3 7 

M1840 (Toilet transfer)= 2 or more 

OR 

M1850 (Transferring) = 2 or more 
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OR 

Ml860 (Ambulation) = 4 or more 

Primary or Other Diagnosis = Ortho 1 - Leg Disorders or Gait Disorders 

19 AND 7 2 7 

Ml324 (most problematic pressure ulcer stage)= 1, 2, 3 or 4 

Primary or Other Diagnosis= Ortho 1 -Leg OR Ortho 2- Other 

20 orthopedic disorders 2 3 AND 

Ml 030 (Therapy at home) = 1 (IV /Infusion) or 2 (Parenteral) 

21 Primary or Other Diagnosis = Psych 1 - Affective and other psychoses, 

depression 

22 Primary or Other Diagnosis = Psych 2 - Degenerative and other organic 

psychiatric disorders 

23 Primary or Other Diagnosis = Pulmonary disorders 

24 Primary or Other Diagnosis = Pulmonary disorders AND 1 Ml860 (Ambulation) = 1 or more 

25 Primary Diagnosis= Skin 1 -Traumatic wounds, bums, and post- 2 14 6 14 operative complications 

26 Other Diagnosis= Skin 1 -Traumatic wounds, bums, post-operative 5 11 7 11 complications 

Primary or Other Diagnosis = Skin 1 -Traumatic wounds, bums, and 

post-operative complications OR Skin 2 - Ulcers and other skin 

27 conditions 

AND 

Ml 030 (Therapy at home) = 1 (IV /Infusion) or 2 (Parenteral) 

28 Primary or Other Diagnosis = Skin 2 - Ulcers and other skin conditions 1 14 7 14 

29 Primary or Other Diagnosis = Tracheostomy 1 10 10 

30 Primary or Other Diagnosis= Urostomy/Cystostomy 17 10 

31 Ml 030 (Therapy at home) = 1 (IV /Infusion) or 2 (Parenteral) 10 1 10 

32 Ml030 (Therapy at home)= 3 (Enteral) 13 7 

33 Ml200 (Vision)= 1 or more 1 

34 Ml242 (Pain)= 3 or 4 3 2 

35 Ml308 = Two or more pressure ulcers at stage 3 or 4 2 4 2 

36 Ml324 (Most problematic pressure ulcer stage)= 1 or 2 3 16 6 15 

37 Ml324 (Most problematic pressure ulcer stage)= 3 or 4 5 27 8 22 

38 Ml334 (Stasis ulcer status)= 2 3 12 5 12 

39 Ml334 (Stasis ulcer status)= 3 5 15 7 15 

40 Ml342 (Surgical wound status)= 2 2 6 4 11 

41 Ml342 (Surgical wound status)= 3 5 4 8 

42 Ml400 (Dyspnea)= 2, 3, or 4 1 1 

43 Ml620 (Bowel Incontinence)= 2 to 5 4 3 

44 Ml630 (Ostomy)= 1 or 2 2 9 2 7 

45 M2030 (Injectable Drug Use)= 0, 1, 2, or 3 

FUNCTIONAL DIMENSION 

46 Ml810 or Ml820 (Dressing upper orlower body)= 1, 2, or 3 1 2 

47 Ml830 (Bathing)= 2 or more 6 4 5 

48 Ml840 (Toilet transferring)= 2 or more 1 

49 Ml850 (Transferring)= 2 or more 2 1 2 
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7For Step 1, 41% of episodes were in the medium 

functional level (All with score 13). 

For Step 2.1, 86.7% of episodes were in the low 

functional level (Most with scores 6 to 7). 

For Step 2.2, 81.5% of episodes were in the low 

functional level (Most with score 0). 

For Step 3, 46.7% of episodes were in the 

medium functional level (Most with score 9). 

For Step 4, 29.9% of episodes were in the 

medium functional level (Most with score 6). 

BILLING CODE 4120–01–C 

In updating the four-equation model 

for CY 2019, using 2017 home health 

claims data (the last update to the fourequation model for CY 2018 used CY 

2016 home health claims data), there 

were few changes to the point values for 

the variables in the four-equation 

model. These relatively minor changes 

reflect the change in the relationship 

between the grouper variables and 

resource use between CY 2016 and CY 

2017. The CY 2019 four-equation model 

resulted in 113 point-giving variables 

being used in the model (as compared 

to the 119 variables for the CY 2018 

recalibration, which can be found in 

Table 2 of the CY 2018 HH PPS final 

rule (82 FR 51684)). There were 7 

variables that were added to the model 

and 13 variables that were dropped from 

the model due to the absence of 

additional resources associated with the 

variable. Of the variables that were in 

both the four-equation model for CY 

2019 and the four-equation model for 

CY 2018, the points for 10 variables 

increased in the CY 2019 four-equation 

model and the points for 67 variables 

decreased in the CY 2019 4-equation 

model. There were 29 variables with the 

same point values. 

Step 2: Re-defining the clinical and 

functional thresholds so they are 

reflective of the new points associated 

with the CY 2019 four-equation model. 

After estimating the points for each of 

the variables and summing the clinical 

and functional points for each episode, 

we look at the distribution of the 

clinical score and functional score, 

breaking the episodes into different 

steps. The categorizations for the steps 

are as follows: 

• Step 1: First and second episodes, 

0–13 therapy visits. 

• Step 2.1: First and second episodes, 

14–19 therapy visits. 

• Step 2.2: Third episodes and 

beyond, 14–19 therapy visits. 

• Step 3: Third episodes and beyond, 

0–13 therapy visits. 

• Step 4: Episodes with 20+ therapy 

visits. 

We then divide the distribution of the 

clinical score for episodes within a step 

such that a third of episodes are 

classified as low clinical score, a third 

of episodes are classified as medium 

clinical score, and a third of episodes 

are classified as high clinical score. The 

same approach is then done looking at 

the functional score. It was not always 

possible to evenly divide the episodes 

within each step into thirds due to 

many episodes being clustered around 

one particular score.7 Also, we looked at 

the average resource use associated with 

each clinical and functional score and 

used that as a guide for setting our 

thresholds. We grouped scores with 

similar average resource use within the 

same level (even if it meant that more 

or less than a third of episodes were 

placed within a level). The new 

thresholds, based off the CY 2019 fourequation model points are shown in 

Table 6. 

TABLE 6—PROPOSED CY 2019 CLINICAL AND FUNCTIONAL THRESHOLDS

1st and 2nd Episodes 3rd+ Episodes All Episodes 

0 to 13 

therapy visits 

14 to 19 

therapy visits 

0 to 13 

therapy visits 

14 to 19 

therapy visits 

20+ therapy 

visits 

Grouping Step 1 2 3 4 5 

Equations used to calculate points 

(see Table 2) 

1 2 3 4 (2&4) 

Dimension Severity 

Level 

........................... ........................... ........................... ........................... ...........................

Clinical ............................................. C1 ............ 0 to 1 ................ 0 to 1 ................ 0 to 1 ................ 0 to 1 ................ 0 to 3. 

C2 ............ 2 to 3 ................ 2 to 7 ................ 2 ....................... 2 to 9 ................ 4 to 16. 

C3 ............ 4+ ..................... 8+ ..................... 3+ ..................... 10+ ................... 17+. 

Functional ........................................ F1 ............ 0 to 12 .............. 0 to 7 ................ 0 to 6 ................ 0 to 2 ................ 0 to 2. 

F2 ............ 13 ..................... 8 to 12 .............. 7 to 10 .............. 3 to 7 ................ 3 to 6. 

F3 ............ 14+ ................... 13+ ................... 11+ ................... 8+ ..................... 7+. 

Step 3: Once the clinical and 

functional thresholds are determined 

and each episode is assigned a clinical 

and functional level, the payment 

regression is estimated with an 

episode’s wage-weighted minutes of 

care as the dependent variable. 

Independent variables in the model are 

indicators for the step of the episode as 

well as the clinical and functional levels 

within each step of the episode. Like the 

four-equation model, the payment 

regression model is also estimated with 

robust standard errors that are clustered 

at the beneficiary level. Table 7 shows 

the regression coefficients for the 

variables in the payment regression 

model updated with CY 2017 home 


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8Medicare Payment Advisory Commission 

(MedPAC), Report to the Congress: Medicare 

Payment Policy. March 2011, P. 176. 

9When computing the average, we compute a 

weighted average, assigning a value of one to each 

normal episode and a value equal to the episode 

length divided by 60 for PEPs. 

health claims data. The R-squared value 

for the payment regression model is 

0.5508 (an increase from 0.5095 for the 

CY 2018 recalibration). 

TABLE 7—PAYMENT REGRESSION MODEL

Payment 

regression 

from 

4-equation 

model for 

CY 2019 

Step 1, Clinical Score Medium ............................................................................................................................................................ $21.81 

Step 1, Clinical Score High ................................................................................................................................................................. 54.06 

Step 1, Functional Score Medium ....................................................................................................................................................... 70.54 

Step 1, Functional Score High ............................................................................................................................................................ 99.78 

Step 2.1, Clinical Score Medium ......................................................................................................................................................... 50.90 

Step 2.1, Clinical Score High .............................................................................................................................................................. 118.77 

Step 2.1, Functional Score Medium .................................................................................................................................................... 25.36 

Step 2.1, Functional Score High ......................................................................................................................................................... 31.96 

Step 2.2, Clinical Score Medium ......................................................................................................................................................... 48.03 

Step 2.2, Clinical Score High .............................................................................................................................................................. 187.73 

Step 2.2, Functional Score Medium .................................................................................................................................................... 50.06 

Step 2.2, Functional Score High ......................................................................................................................................................... 0.00 

Step 3, Clinical Score Medium ............................................................................................................................................................ 18.05 

Step 3, Clinical Score High ................................................................................................................................................................. 83.67 

Step 3, Functional Score Medium ....................................................................................................................................................... 56.10 

Step 3, Functional Score High ............................................................................................................................................................ 81.90 

Step 4, Clinical Score Medium ............................................................................................................................................................ 70.97 

Step 4, Clinical Score High ................................................................................................................................................................. 245.97 

Step 4, Functional Score Medium ....................................................................................................................................................... 4.60 

Step 4, Functional Score High ............................................................................................................................................................ 17.77 

Step 2.1, 1st and 2nd Episodes, 14 to 19 Therapy Visits .................................................................................................................. 515.04 

Step 2.2, 3rd+ Episodes, 14 to 19 Therapy Visits .............................................................................................................................. 510.26 

Step 3, 3rd+ Episodes, 0–13 Therapy Visits ...................................................................................................................................... ¥60.34 

Step 4, All Episodes, 20+ Therapy Visits ............................................................................................................................................ 895.79 

Intercept ............................................................................................................................................................................................... 375.32 

Source: CY 2017 Medicare claims data for episodes ending on or before December 31, 2017 (as of March 2, 2018) for which we had a linked 

OASIS assessment. 

Step 4: We use the coefficients from 

the payment regression model to predict 

each episode’s wage-weighted minutes 

of care (resource use). We then divide 

these predicted values by the mean of 

the dependent variable (that is, the 

average wage-weighted minutes of care 

across all episodes used in the payment 

regression). This division constructs the 

weight for each episode, which is 

simply the ratio of the episode’s 

predicted wage-weighted minutes of 

care divided by the average wageweighted minutes of care in the sample. 

Each episode is then aggregated into one 

of the 153 home health resource groups 

(HHRGs) and the ‘‘raw’’ weight for each 

HHRG was calculated as the average of 

the episode weights within the HHRG. 

Step 5: The raw weights associated 

with 0 to 5 therapy visits are then 

increased by 3.75 percent, the weights 

associated with 14–15 therapy visits are 

decreased by 2.5 percent, and the 

weights associated with 20+ therapy 

visits are decreased by 5 percent. These 

adjustments to the case-mix weights 

were finalized in the CY 2012 HH PPS 

final rule (76 FR 68557) and were done 

to address MedPAC’s concerns that the 

HH PPS overvalues therapy episodes 

and undervalues non-therapy episodes 

and to better align the case-mix weights 

with episode costs estimated from cost 

report data.8

Step 6: After the adjustments in step 

5 are applied to the raw weights, the 

weights are further adjusted to create an 

increase in the payment weights for the 

therapy visit steps between the therapy 

thresholds. Weights with the same 

clinical severity level, functional 

severity level, and early/later episode 

status were grouped together. Then 

within those groups, the weights for 

each therapy step between thresholds 

are gradually increased. We do this by 

interpolating between the main 

thresholds on the model (from 0–5 to 

14–15 therapy visits, and from 14–15 to 

20+ therapy visits). We use a linear 

model to implement the interpolation so 

the payment weight increase for each 

step between the thresholds (such as the 

increase between 0–5 therapy visits and 

6 therapy visits and the increase 

between 6 therapy visits and 7–9 

therapy visits) are constant. This 

interpolation is identical to the process 

finalized in the CY 2012 HH PPS final 

rule (76 FR 68555). 

Step 7: The interpolated weights are 

then adjusted so that the average casemix for the weights is equal to 1.0000.9

This last step creates the proposed CY 

2019 case-mix weights shown in Table 

8. 


amozie on DSK3GDR082PROD with PROPOSALS2
32358 Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules 

TABLE 8—PROPOSED CY 2019 CASE-MIX PAYMENT WEIGHTS

Pay group Description 

Clinical and 

functional 

levels 

(1 = low; 

2 = medium; 

3 = high) 

Proposed 

weights for 

CY 2019 

10111 ............ 1st and 2nd Episodes, 0 to 5 Therapy Visits ............................................................................... C1F1S1 0.5459 

10112 ............ 1st and 2nd Episodes, 6 Therapy Visits ...................................................................................... C1F1S2 0.6801 

10113 ............ 1st and 2nd Episodes, 7 to 9 Therapy Visits ............................................................................... C1F1S3 0.8143 

10114 ............ 1st and 2nd Episodes, 10 Therapy Visits .................................................................................... C1F1S4 0.9485 

10115 ............ 1st and 2nd Episodes, 11 to 13 Therapy Visits ........................................................................... C1F1S5 1.0828 

10121 ............ 1st and 2nd Episodes, 0 to 5 Therapy Visits ............................................................................... C1F2S1 0.6485 

10122 ............ 1st and 2nd Episodes, 6 Therapy Visits ...................................................................................... C1F2S2 0.7691 

10123 ............ 1st and 2nd Episodes, 7 to 9 Therapy Visits ............................................................................... C1F2S3 0.8897 

10124 ............ 1st and 2nd Episodes, 10 Therapy Visits .................................................................................... C1F2S4 1.0104 

10125 ............ 1st and 2nd Episodes, 11 to 13 Therapy Visits ........................................................................... C1F2S5 1.1310 

10131 ............ 1st and 2nd Episodes, 0 to 5 Therapy Visits ............................................................................... C1F3S1 0.6910 

10132 ............ 1st and 2nd Episodes, 6 Therapy Visits ...................................................................................... C1F3S2 0.8049 

10133 ............ 1st and 2nd Episodes, 7 to 9 Therapy Visits ............................................................................... C1F3S3 0.9189 

10134 ............ 1st and 2nd Episodes, 10 Therapy Visits .................................................................................... C1F3S4 1.0328 

10135 ............ 1st and 2nd Episodes, 11 to 13 Therapy Visits ........................................................................... C1F3S5 1.1467 

10211 ............ 1st and 2nd Episodes, 0 to 5 Therapy Visits ............................................................................... C2F1S1 0.5776 

10212 ............ 1st and 2nd Episodes, 6 Therapy Visits ...................................................................................... C2F1S2 0.7194 

10213 ............ 1st and 2nd Episodes, 7 to 9 Therapy Visits ............................................................................... C2F1S3 0.8612 

10214 ............ 1st and 2nd Episodes, 10 Therapy Visits .................................................................................... C2F1S4 1.0030 

10215 ............ 1st and 2nd Episodes, 11 to 13 Therapy Visits ........................................................................... C2F1S5 1.1448 

10221 ............ 1st and 2nd Episodes, 0 to 5 Therapy Visits ............................................................................... C2F2S1 0.6802 

10222 ............ 1st and 2nd Episodes, 6 Therapy Visits ...................................................................................... C2F2S2 0.8084 

10223 ............ 1st and 2nd Episodes, 7 to 9 Therapy Visits ............................................................................... C2F2S3 0.9366 

10224 ............ 1st and 2nd Episodes, 10 Therapy Visits .................................................................................... C2F2S4 1.0648 

10225 ............ 1st and 2nd Episodes, 11 to 13 Therapy Visits ........................................................................... C2F2S5 1.1930 

10231 ............ 1st and 2nd Episodes, 0 to 5 Therapy Visits ............................................................................... C2F3S1 0.7227 

10232 ............ 1st and 2nd Episodes, 6 Therapy Visits ...................................................................................... C2F3S2 0.8442 

10233 ............ 1st and 2nd Episodes, 7 to 9 Therapy Visits ............................................................................... C2F3S3 0.9657 

10234 ............ 1st and 2nd Episodes, 10 Therapy Visits .................................................................................... C2F3S4 1.0872 

10235 ............ 1st and 2nd Episodes, 11 to 13 Therapy Visits ........................................................................... C2F3S5 1.2087 

10311 ............ 1st and 2nd Episodes, 0 to 5 Therapy Visits ............................................................................... C3F1S1 0.6245 

10312 ............ 1st and 2nd Episodes, 6 Therapy Visits ...................................................................................... C3F1S2 0.7755 

10313 ............ 1st and 2nd Episodes, 7 to 9 Therapy Visits ............................................................................... C3F1S3 0.9264 

10314 ............ 1st and 2nd Episodes, 10 Therapy Visits .................................................................................... C3F1S4 1.0774 

10315 ............ 1st and 2nd Episodes, 11 to 13 Therapy Visits ........................................................................... C3F1S5 1.2284 

10321 ............ 1st and 2nd Episodes, 0 to 5 Therapy Visits ............................................................................... C3F2S1 0.7271 

10322 ............ 1st and 2nd Episodes, 6 Therapy Visits ...................................................................................... C3F2S2 0.8645 

10323 ............ 1st and 2nd Episodes, 7 to 9 Therapy Visits ............................................................................... C3F2S3 1.0019 

10324 ............ 1st and 2nd Episodes, 10 Therapy Visits .................................................................................... C3F2S4 1.1392 

10325 ............ 1st and 2nd Episodes, 11 to 13 Therapy Visits ........................................................................... C3F2S5 1.2766 

10331 ............ 1st and 2nd Episodes, 0 to 5 Therapy Visits ............................................................................... C3F3S1 0.7696 

10332 ............ 1st and 2nd Episodes, 6 Therapy Visits ...................................................................................... C3F3S2 0.9003 

10333 ............ 1st and 2nd Episodes, 7 to 9 Therapy Visits ............................................................................... C3F3S3 1.0310 

10334 ............ 1st and 2nd Episodes, 10 Therapy Visits .................................................................................... C3F3S4 1.1617 

10335 ............ 1st and 2nd Episodes, 11 to 13 Therapy Visits ........................................................................... C3F3S5 1.2923 

21111 ............ 1st and 2nd Episodes, 14 to 15 Therapy Visits ........................................................................... C1F1S1 1.2170 

21112 ............ 1st and 2nd Episodes, 16 to 17 Therapy Visits ........................................................................... C1F1S2 1.3756 

21113 ............ 1st and 2nd Episodes, 18 to 19 Therapy Visits ........................................................................... C1F1S3 1.5342 

21121 ............ 1st and 2nd Episodes, 14 to 15 Therapy Visits ........................................................................... C1F2S1 1.2516 

21122 ............ 1st and 2nd Episodes, 16 to 17 Therapy Visits ........................................................................... C1F2S2 1.4008 

21123 ............ 1st and 2nd Episodes, 18 to 19 Therapy Visits ........................................................................... C1F2S3 1.5499 

21131 ............ 1st and 2nd Episodes, 14 to 15 Therapy Visits ........................................................................... C1F3S1 1.2607 

21132 ............ 1st and 2nd Episodes, 16 to 17 Therapy Visits ........................................................................... C1F3S2 1.4126 

21133 ............ 1st and 2nd Episodes, 18 to 19 Therapy Visits ........................................................................... C1F3S3 1.5646 

21211 ............ 1st and 2nd Episodes, 14 to 15 Therapy Visits ........................................................................... C2F1S1 1.2866 

21212 ............ 1st and 2nd Episodes, 16 to 17 Therapy Visits ........................................................................... C2F1S2 1.4535 

21213 ............ 1st and 2nd Episodes, 18 to 19 Therapy Visits ........................................................................... C2F1S3 1.6204 

21221 ............ 1st and 2nd Episodes, 14 to 15 Therapy Visits ........................................................................... C2F2S1 1.3212 

21222 ............ 1st and 2nd Episodes, 16 to 17 Therapy Visits ........................................................................... C2F2S2 1.4786 

21223 ............ 1st and 2nd Episodes, 18 to 19 Therapy Visits ........................................................................... C2F2S3 1.6361 

21231 ............ 1st and 2nd Episodes, 14 to 15 Therapy Visits ........................................................................... C2F3S1 1.3302 

21232 ............ 1st and 2nd Episodes, 16 to 17 Therapy Visits ........................................................................... C2F3S2 1.4905 

21233 ............ 1st and 2nd Episodes, 18 to 19 Therapy Visits ........................................................................... C2F3S3 1.6508 

21311 ............ 1st and 2nd Episodes, 14 to 15 Therapy Visits ........................................................................... C3F1S1 1.3793 

21312 ............ 1st and 2nd Episodes, 16 to 17 Therapy Visits ........................................................................... C3F1S2 1.5930 

21313 ............ 1st and 2nd Episodes, 18 to 19 Therapy Visits ........................................................................... C3F1S3 1.8067 

21321 ............ 1st and 2nd Episodes, 14 to 15 Therapy Visits ........................................................................... C3F2S1 1.4140 

21322 ............ 1st and 2nd Episodes, 16 to 17 Therapy Visits ........................................................................... C3F2S2 1.6182 


amozie on DSK3GDR082PROD with PROPOSALS2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules 32359 

TABLE 8—PROPOSED CY 2019 CASE-MIX PAYMENT WEIGHTS—Continued 

Pay group Description 

Clinical and 

functional 

levels 

(1 = low; 

2 = medium; 

3 = high) 

Proposed 

weights for 

CY 2019 

21323 ............ 1st and 2nd Episodes, 18 to 19 Therapy Visits ........................................................................... C3F2S3 1.8224 

21331 ............ 1st and 2nd Episodes, 14 to 15 Therapy Visits ........................................................................... C3F3S1 1.4230 

21332 ............ 1st and 2nd Episodes, 16 to 17 Therapy Visits ........................................................................... C3F3S2 1.6300 

21333 ............ 1st and 2nd Episodes, 18 to 19 Therapy Visits ........................................................................... C3F3S3 1.8371 

22111 ............ 3rd+ Episodes, 14 to 15 Therapy Visits ....................................................................................... C1F1S1 1.2104 

22112 ............ 3rd+ Episodes, 16 to 17 Therapy Visits ....................................................................................... C1F1S2 1.3713 

22113 ............ 3rd+ Episodes, 18 to 19 Therapy Visits ....................................................................................... C1F1S3 1.5321 

22121 ............ 3rd+ Episodes, 14 to 15 Therapy Visits ....................................................................................... C1F2S1 1.2789 

22122 ............ 3rd+ Episodes, 16 to 17 Therapy Visits ....................................................................................... C1F2S2 1.4189 

22123 ............ 3rd+ Episodes, 18 to 19 Therapy Visits ....................................................................................... C1F2S3 1.5589 

22131 ............ 3rd+ Episodes, 14 to 15 Therapy Visits ....................................................................................... C1F3S1 1.2789 

22132 ............ 3rd+ Episodes, 16 to 17 Therapy Visits ....................................................................................... C1F3S2 1.4248 

22133 ............ 3rd+ Episodes, 18 to 19 Therapy Visits ....................................................................................... C1F3S3 1.5706 

22211 ............ 3rd+ Episodes, 14 to 15 Therapy Visits ....................................................................................... C2F1S1 1.2761 

22212 ............ 3rd+ Episodes, 16 to 17 Therapy Visits ....................................................................................... C2F1S2 1.4465 

22213 ............ 3rd+ Episodes, 18 to 19 Therapy Visits ....................................................................................... C2F1S3 1.6169 

22221 ............ 3rd+ Episodes, 14 to 15 Therapy Visits ....................................................................................... C2F2S1 1.3445 

22222 ............ 3rd+ Episodes, 16 to 17 Therapy Visits ....................................................................................... C2F2S2 1.4942 

22223 ............ 3rd+ Episodes, 18 to 19 Therapy Visits ....................................................................................... C2F2S3 1.6438 

22231 ............ 3rd+ Episodes, 14 to 15 Therapy Visits ....................................................................................... C2F3S1 1.3445 

22232 ............ 3rd+ Episodes, 16 to 17 Therapy Visits ....................................................................................... C2F3S2 1.5000 

22233 ............ 3rd+ Episodes, 18 to 19 Therapy Visits ....................................................................................... C2F3S3 1.6555 

22311 ............ 3rd+ Episodes, 14 to 15 Therapy Visits ....................................................................................... C3F1S1 1.4670 

22312 ............ 3rd+ Episodes, 16 to 17 Therapy Visits ....................................................................................... C3F1S2 1.6515 

22313 ............ 3rd+ Episodes, 18 to 19 Therapy Visits ....................................................................................... C3F1S3 1.8360 

22321 ............ 3rd+ Episodes, 14 to 15 Therapy Visits ....................................................................................... C3F2S1 1.5355 

22322 ............ 3rd+ Episodes, 16 to 17 Therapy Visits ....................................................................................... C3F2S2 1.6992 

22323 ............ 3rd+ Episodes, 18 to 19 Therapy Visits ....................................................................................... C3F2S3 1.8629 

22331 ............ 3rd+ Episodes, 14 to 15 Therapy Visits ....................................................................................... C3F3S1 1.5355 

22332 ............ 3rd+ Episodes, 16 to 17 Therapy Visits ....................................................................................... C3F3S2 1.7050 

22333 ............ 3rd+ Episodes, 18 to 19 Therapy Visits ....................................................................................... C3F3S3 1.8746 

30111 ............ 3rd+ Episodes, 0 to 5 Therapy Visits ........................................................................................... C1F1S1 0.4581 

30112 ............ 3rd+ Episodes, 6 Therapy Visits .................................................................................................. C1F1S2 0.6086 

30113 ............ 3rd+ Episodes, 7 to 9 Therapy Visits ........................................................................................... C1F1S3 0.7591 

30114 ............ 3rd+ Episodes, 10 Therapy Visits ................................................................................................ C1F1S4 0.9095 

30115 ............ 3rd+ Episodes, 11 to 13 Therapy Visits ....................................................................................... C1F1S5 1.0600 

30121 ............ 3rd+ Episodes, 0 to 5 Therapy Visits ........................................................................................... C1F2S1 0.5397 

30122 ............ 3rd+ Episodes, 6 Therapy Visits .................................................................................................. C1F2S2 0.6876 

30123 ............ 3rd+ Episodes, 7 to 9 Therapy Visits ........................................................................................... C1F2S3 0.8354 

30124 ............ 3rd+ Episodes, 10 Therapy Visits ................................................................................................ C1F2S4 0.9832 

30125 ............ 3rd+ Episodes, 11 to 13 Therapy Visits ....................................................................................... C1F2S5 1.1310 

30131 ............ 3rd+ Episodes, 0 to 5 Therapy Visits ........................................................................................... C1F3S1 0.5772 

30132 ............ 3rd+ Episodes, 6 Therapy Visits .................................................................................................. C1F3S2 0.7176 

30133 ............ 3rd+ Episodes, 7 to 9 Therapy Visits ........................................................................................... C1F3S3 0.8579 

30134 ............ 3rd+ Episodes, 10 Therapy Visits ................................................................................................ C1F3S4 0.9982 

30135 ............ 3rd+ Episodes, 11 to 13 Therapy Visits ....................................................................................... C1F3S5 1.1385 

30211 ............ 3rd+ Episodes, 0 to 5 Therapy Visits ........................................................................................... C2F1S1 0.4844 

30212 ............ 3rd+ Episodes, 6 Therapy Visits .................................................................................................. C2F1S2 0.6427 

30213 ............ 3rd+ Episodes, 7 to 9 Therapy Visits ........................................................................................... C2F1S3 0.8011 

30214 ............ 3rd+ Episodes, 10 Therapy Visits ................................................................................................ C2F1S4 0.9594 

30215 ............ 3rd+ Episodes, 11 to 13 Therapy Visits ....................................................................................... C2F1S5 1.1178 

30221 ............ 3rd+ Episodes, 0 to 5 Therapy Visits ........................................................................................... C2F2S1 0.5660 

30222 ............ 3rd+ Episodes, 6 Therapy Visits .................................................................................................. C2F2S2 0.7217 

30223 ............ 3rd+ Episodes, 7 to 9 Therapy Visits ........................................................................................... C2F2S3 0.8774 

30224 ............ 3rd+ Episodes, 10 Therapy Visits ................................................................................................ C2F2S4 1.0331 

30225 ............ 3rd+ Episodes, 11 to 13 Therapy Visits ....................................................................................... C2F2S5 1.1888 

30231 ............ 3rd+ Episodes, 0 to 5 Therapy Visits ........................................................................................... C2F3S1 0.6035 

30232 ............ 3rd+ Episodes, 6 Therapy Visits .................................................................................................. C2F3S2 0.7517 

30233 ............ 3rd+ Episodes, 7 to 9 Therapy Visits ........................................................................................... C2F3S3 0.8999 

30234 ............ 3rd+ Episodes, 10 Therapy Visits ................................................................................................ C2F3S4 1.0481 

30235 ............ 3rd+ Episodes, 11 to 13 Therapy Visits ....................................................................................... C2F3S5 1.1963 

30311 ............ 3rd+ Episodes, 0 to 5 Therapy Visits ........................................................................................... C3F1S1 0.5798 

30312 ............ 3rd+ Episodes, 6 Therapy Visits .................................................................................................. C3F1S2 0.7573 

30313 ............ 3rd+ Episodes, 7 to 9 Therapy Visits ........................................................................................... C3F1S3 0.9347 

30314 ............ 3rd+ Episodes, 10 Therapy Visits ................................................................................................ C3F1S4 1.1122 

30315 ............ 3rd+ Episodes, 11 to 13 Therapy Visits ....................................................................................... C3F1S5 1.2896 

30321 ............ 3rd+ Episodes, 0 to 5 Therapy Visits ........................................................................................... C3F2S1 0.6614 

30322 ............ 3rd+ Episodes, 6 Therapy Visits .................................................................................................. C3F2S2 0.8362 


amozie on DSK3GDR082PROD with PROPOSALS2
32360 Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules 

TABLE 8—PROPOSED CY 2019 CASE-MIX PAYMENT WEIGHTS—Continued 

Pay group Description 

Clinical and 

functional 

levels 

(1 = low; 

2 = medium; 

3 = high) 

Proposed 

weights for 

CY 2019 

30323 ............ 3rd+ Episodes, 7 to 9 Therapy Visits ........................................................................................... C3F2S3 1.0110 

30324 ............ 3rd+ Episodes, 10 Therapy Visits ................................................................................................ C3F2S4 1.1858 

30325 ............ 3rd+ Episodes, 11 to 13 Therapy Visits ....................................................................................... C3F2S5 1.3607 

30331 ............ 3rd+ Episodes, 0 to 5 Therapy Visits ........................................................................................... C3F3S1 0.6989 

30332 ............ 3rd+ Episodes, 6 Therapy Visits .................................................................................................. C3F3S2 0.8662 

30333 ............ 3rd+ Episodes, 7 to 9 Therapy Visits ........................................................................................... C3F3S3 1.0336 

30334 ............ 3rd+ Episodes, 10 Therapy Visits ................................................................................................ C3F3S4 1.2009 

30335 ............ 3rd+ Episodes, 11 to 13 Therapy Visits ....................................................................................... C3F3S5 1.3682 

40111 ............ All Episodes, 20+ Therapy Visits ................................................................................................. C1F1S1 1.6929 

40121 ............ All Episodes, 20+ Therapy Visits ................................................................................................. C1F2S1 1.6990 

40131 ............ All Episodes, 20+ Therapy Visits ................................................................................................. C1F3S1 1.7165 

40211 ............ All Episodes, 20+ Therapy Visits ................................................................................................. C2F1S1 1.7874 

40221 ............ All Episodes, 20+ Therapy Visits ................................................................................................. C2F2S1 1.7935 

40231 ............ All Episodes, 20+ Therapy Visits ................................................................................................. C2F3S1 1.8110 

40311 ............ All Episodes, 20+ Therapy Visits ................................................................................................. C3F1S1 2.0204 

40321 ............ All Episodes, 20+ Therapy Visits ................................................................................................. C3F2S1 2.0266 

40331 ............ All Episodes, 20+ Therapy Visits ................................................................................................. C3F3S1 2.0441 

To ensure the changes to the HH PPS 

case-mix weights are implemented in a 

budget neutral manner, we then apply a 

case-mix budget neutrality factor to the 

proposed CY 2019 national, 

standardized 60-day episode payment 

rate (see section III.C.3. of this proposed 

rule). The case-mix budget neutrality 

factor is calculated as the ratio of total 

payments when the CY 2019 HH PPS 

case-mix weights (developed using CY 

2017 home health claims data) are 

applied to CY 2017 utilization (claims) 

data to total payments when CY 2018 

HH PPS case-mix weights (developed 

using CY 2016 home health claims data) 

are applied to CY 2017 utilization data. 

This produces a case-mix budget 

neutrality factor for CY 2019 of 1.0163. 

C. CY 2019 Home Health Payment Rate 

Update 

1. Rebasing and Revising of the Home 

Health Market Basket 

a. Background 

Section 1895(b)(3)(B) of the Act 

requires that the standard prospective 

payment amounts for CY 2019 be 

increased by a factor equal to the 

applicable home health market basket 

update for those HHAs that submit 

quality data as required by the 

Secretary. Effective for cost reporting 

periods beginning on or after July 1, 

1980, we developed and adopted an 

HHA input price index (that is, the 

home health ‘‘market basket’’). Although 

‘‘market basket’’ technically describes 

the mix of goods and services used to 

produce home health care, this term is 

also commonly used to denote the input 

price index derived from that market 

basket. Accordingly, the term ‘‘home 

health market basket’’ used in this 

document refers to the HHA input price 

index. 

The percentage change in the home 

health market basket reflects the average 

change in the price of goods and 

services purchased by HHAs in 

providing an efficient level of home 

health care services. We first used the 

home health market basket to adjust 

HHA cost limits by an amount that 

reflected the average increase in the 

prices of the goods and services used to 

furnish reasonable cost home health 

care. This approach linked the increase 

in the cost limits to the efficient 

utilization of resources. For a greater 

discussion on the home health market 

basket, see the notice with comment 

period published in the February 15, 

1980 Federal Register (45 FR 10450, 

10451), the notice with comment period 

published in the February 14, 1995 

Federal Register (60 FR 8389, 8392), 

and the notice with comment period 

published in the July 1, 1996 Federal 

Register (61 FR 34344, 34347). 

Beginning with the FY 2002 HHA PPS 

payments, we used the home health 

market basket to update payments under 

the HHA PPS. We last rebased the home 

health market basket effective with the 

CY 2013 update (77 FR 67081). 

The home health market basket is a 

fixed-weight, Laspeyres-type price 

index. A Laspeyres-type price index 

measures the change in price, over time, 

of the same mix of goods and services 

purchased in the base period. Any 

changes in the quantity or mix of goods 

and services (that is, intensity) 

purchased over time are not measured. 

The index itself is constructed in 

three steps. First, a base period is 

selected (in this proposed rule, we are 

proposing to use 2016 as the base 

period) and total base period 

expenditures are estimated for a set of 

mutually exclusive and exhaustive 

spending categories, with the proportion 

of total costs that each category 

represents being calculated. These 

proportions are called ‘‘cost weights’’ or 

‘‘expenditure weights.’’ Second, each 

expenditure category is matched to an 

appropriate price or wage variable, 

referred to as a ‘‘price proxy.’’ In almost 

every instance, these price proxies are 

derived from publicly available 

statistical series that are published on a 

consistent schedule (preferably at least 

on a quarterly basis). Finally, the 

expenditure weight for each cost 

category is multiplied by the level of its 

respective price proxy. The sum of these 

products (that is, the expenditure 

weights multiplied by their price index 

levels) for all cost categories yields the 

composite index level of the market 

basket in a given period. Repeating this 

step for other periods produces a series 

of market basket levels over time. 

Dividing an index level for a given 

period by an index level for an earlier 

period produces a rate of growth in the 

input price index over that timeframe. 

As noted previously, the market 

basket is described as a fixed-weight 

index because it represents the change 

in price over time of a constant mix 

(quantity and intensity) of goods and 

services needed to provide HHA 

services. The effects on total 

expenditures resulting from changes in 

the mix of goods and services purchased 


amozie on DSK3GDR082PROD with PROPOSALS2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules 32361 

subsequent to the base period are not 

measured. For example, a HHA hiring 

more nurses to accommodate the needs 

of patients would increase the volume 

of goods and services purchased by the 

HHA, but would not be factored into the 

price change measured by a fixedweight home health market basket. Only 

when the index is rebased would 

changes in the quantity and intensity be 

captured, with those changes being 

reflected in the cost weights. Therefore, 

we rebase the market basket periodically 

so that the cost weights reflect recent 

changes in the mix of goods and 

services that HHAs purchase (HHA 

inputs) to furnish inpatient care 

between base periods. 

b. Rebasing and Revising the Home 

Health Market Basket 

We believe that it is desirable to 

rebase the home health market basket 

periodically so that the cost category 

weights reflect changes in the mix of 

goods and services that HHAs purchase 

in furnishing home health care. We 

based the cost category weights in the 

current home health market basket on 

CY 2010 data. We are proposing to 

rebase and revise the home health 

market basket to reflect 2016 Medicare 

cost report (MCR) data, the latest 

available and most complete data on the 

actual structure of HHA costs. 

The terms ‘‘rebasing’’ and ‘‘revising,’’ 

while often used interchangeably, 

denote different activities. The term 

‘‘rebasing’’ means moving the base year 

for the structure of costs of an input 

price index (that is, in this exercise, we 

are proposing to move the base year cost 

structure from CY 2010 to CY 2016) 

without making any other major 

changes to the methodology. The term 

‘‘revising’’ means changing data sources, 

cost categories, and/or price proxies 

used in the input price index. 

For this proposed rebasing and 

revising, we are rebasing the detailed 

wages and salaries and benefits cost 

weights to reflect 2016 BLS 

Occupational Employment Statistics 

(OES) data on HHAs. The 2010-based 

home health market basket used 2010 

BLS OES data on HHAs. We are also 

proposing to break out the All Other 

(residual) cost category weight into 

more detailed cost categories, based on 

the 2007 Benchmark U.S. Department of 

Commerce, Bureau of Economic 

Analysis (BEA) Input-Output (I–O) 

Table for HHAs. The 2010-based home 

health market basket used the 2002 I–O 

data. Finally, due to its small weight, we 

are proposing to eliminate the cost 

category ‘Postage’ and include these 

expenses in the ‘All Other Services’ cost 

weight. 

c. Derivation of the Proposed 2016- 

Based Home Health Market Basket Cost 

Weights 

The major cost weights for this 

proposed revised and rebased home 

health market basket are derived from 

the Medicare Cost Reports (MCR; CMS 

Form 1728–94) data for freestanding 

HHAs whose cost reporting period 

began on or after October 1, 2015 and 

before October 1, 2016. Of the 2016 

Medicare cost reports for freestanding 

HHAs, approximately 84 percent of the 

reports had a begin date on January 1, 

2016, approximately 6 percent had a 

begin date on July 1, 2016, and 

approximately 4 percent had a begin 

date on October 1, 2015. Using this 

methodology allowed our sample to 

include HHAs with varying cost report 

years including, but not limited to, the 

Federal fiscal or calendar year. We refer 

to the market basket as a calendar year 

market basket because the base period 

for all price proxies and weights are set 

to CY 2016. 

We propose to maintain our policy of 

using data from freestanding HHAs, 

which account for over 90 percent of 

HHAs (82 FR 35383), because we have 

determined that they better reflect 

HHAs’ actual cost structure. Expense 

data for hospital-based HHAs can be 

affected by the allocation of overhead 

costs over the entire institution. 

We are proposing to derive eight 

major expense categories (Wages and 

Salaries, Benefits, Contract Labor, 

Transportation, Professional Liability 

Insurance (PLI), Fixed Capital, Movable 

Capital, and a residual ‘‘All Other’’) 

from the 2016 Medicare HHA cost 

reports. Due to its small weight, we are 

proposing to eliminate the cost category 

‘Postage’ and include these expenses in 

the ‘‘All Other (residual)’’ cost weight. 

These major expense categories are 

based on those cost centers that are 

reimbursable under the HHA PPS, 

specifically Skilled Nursing Care, 

Physical Therapy, Occupational 

Therapy, Speech Pathology, Medical 

Social Services, Home Health Aide, and 

Supplies. These are the same cost 

centers that were used in the 2014 base 

payment rebasing (78 FR 72276), which 

are described in the Abt Associates Inc. 

June 2013, Technical Paper, ‘‘Analyses 

In Support of Rebasing and Updating 

Medicare Home Health Payment Rates’’ 

(https://www.cms.gov/Medicare/ 

Medicare-Fee-for-Service-Payment/ 

HomeHealthPPS/Downloads/Analysesin-Support-of-Rebasing-and-Updatingthe-Medicare-Home-Health-PaymentRates-Technical-Report.pdf). Total costs 

for the HHA PPS reimbursable services 

reflect overhead allocation. We provide 

detail on the calculations for each major 

expense category. 

(1) Wages and Salaries: Wages and 

Salaries costs reflect direct patient care 

wages and salaries costs as well as 

wages and salaries costs associated with 

Plant Operations and Maintenance, 

Transportation, and Administrative and 

General. Specifically, we are proposing 

to calculate Wages and Salaries by 

summing costs from Worksheet A, 

column 1, lines 3 through 12 and 

subtracting line 5.03 (A&G 

Nonreimbursable costs). 

(2) Benefits: Benefits costs reflect 

direct patient care benefit costs as well 

as benefit costs associated with Plant 

Operations and Maintenance, 

Transportation, and Administrative and 

General. Specifically, we are proposing 

to calculate Benefits by summing costs 

from Worksheet A, column 2, lines 3 

through 12 and subtracting line 5.03 

(A&G Nonreimbursable costs). 

(3) Direct Patient Care Contract Labor: 

Contract Labor costs reflect direct 

patient care contract labor. Specifically, 

we are proposing to calculate Contract 

Labor by summing costs from 

Worksheet A, column 4, lines 6 through 

11. 

(4) Transportation: Transportation 

costs reflect direct patient care costs as 

well as transportation costs associated 

with Capital Expenses, Plant Operations 

and Maintenance, and Administrative 

and General. Specifically, we are 

proposing to calculate Transportation by 

summing costs from Worksheet A, 

column 3, lines 1 through 12 and 

subtracting line 5.03 (A&G 

Nonreimbursable costs). 

(5) Professional Liability Insurance: 

Professional Liability Insurance reflects 

premiums, paid losses, and selfinsurance costs. Specifically we are 

proposing to calculate Professional 

Liability Insurance by summing costs 

from Worksheet S2, lines 27.01, 27.02 

and 27.03. 

(6) Fixed Capital: Fixed Capitalrelated costs reflect the portion of 

Medicare-allowable costs reported in 

‘‘Capital Related Buildings and 

Fixtures’’ (Worksheet A, column 5, line 

1). We calculate this Medicare allowable 

portion by first calculating a ratio for 

each provider that reflects fixed capital 

costs as a percentage of HHA 

reimbursable services. Specifically this 

ratio is calculated as the sum of costs 

from Worksheet B, column 1, lines 6 

through 12 divided by the sum of costs 

from Worksheet B, column 1, line 1 

minus lines 3 through 5. This 

percentage is then applied to the sum of 

the costs from Worksheet A, column 5, 

line 1. 


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10http://www.bea.gov/papers/pdf/IOmanual_

092906.pdf. 

(7) Movable Capital: Movable Capitalrelated costs reflect the portion of 

Medicare-allowable costs reported in 

‘‘Capital Related Moveable Equipment’’ 

(Worksheet A, column 5, line 2). We 

calculate this Medicare allowable 

portion by first calculating a ratio for 

each provider that reflects movable 

capital costs as a percentage of HHA 

reimbursable services. Specifically this 

ratio is calculated as the sum of costs 

from Worksheet B, column 2, lines 6 

through 12 divided by the sum of costs 

from Worksheet B, column 2, line 2 

minus lines 3 through 5. This 

percentage is then applied to the sum of 

the costs from Worksheet A, column 5, 

line 2. 

(8) All Other (residual): The ‘‘All 

Other’’ cost weight is a residual, 

calculated by subtracting the major cost 

weight percentages (Wages and Salaries, 

Benefits, Direct Patient Care Contract 

Labor, Transportation, Professional 

Liability Insurance, Fixed Capital, and 

Movable Capital) from 1. 

As prescription drugs and DME are 

not payable under the HH PPS, we 

continue to exclude those items from 

the home health market basket. Totals 

within each of the major cost categories 

were edited to remove reports where the 

data were deemed unreasonable (for 

example, when total costs were not 

greater than zero). We then determined 

the proportion of total Medicare 

allowable costs that each category 

represents. For all of the major cost 

categories except the ‘‘residual’’ All 

Other cost weight, we then removed 

those providers whose derived cost 

weights fall in the top and bottom five 

percent of provider-specific cost weights 

to ensure the removal of outliers. After 

the outliers were removed, we summed 

the costs for each category across all 

remaining providers. We then divided 

this by the sum of total Medicare 

allowable costs across all remaining 

providers to obtain a cost weight for the 

proposed 2016-based home health 

market basket for the given category. 

Table 9 shows the major cost 

categories and their respective cost 

weights as derived from the Medicare 

cost reports for this proposed rule. 

TABLE 9—MAJOR COST CATEGORIES AS DERIVED FROM THE MEDICARE COST REPORTS

Major cost categories 2010 based Proposed 

2016 based 

Wages and Salaries (including allocated direct patient care contract labor) .......................................................... 66.3 65.1 

Benefits (including allocated direct patient care contract labor) ............................................................................. 12.2 10.9 

Transportation .......................................................................................................................................................... 2.5 2.6 

Professional Liability Insurance (Malpractice) ......................................................................................................... 0.4 0.3 

Fixed Capital ............................................................................................................................................................ 1.5 1.4 

Moveable Capital ..................................................................................................................................................... 0.6 0.6 

‘‘All Other’’ residual .................................................................................................................................................. 16.5 19.0 

* Figures may not sum to 100.0 due to rounding. 

The decrease in the wages and 

salaries cost weight of 1.2 percentage 

points and the decrease in the benefits 

cost weight of 1.3 percentage points is 

attributable to both employed 

compensation and direct patient care 

contract labor costs as reported on the 

MCR data. Our analysis of the MCR data 

shows that the decrease in the 

compensation cost weight of 2.4 

percentage points (calculated by 

combining wages and salaries and 

benefits) from 2010 to 2016 occurred 

among for-profit, nonprofit, and 

government providers and among 

providers serving only rural 

beneficiaries, only urban beneficiaries, 

or both rural and urban beneficiaries. 

Over the 2010 to 2016 time period, 

the average number of FTEs per 

provider decreased considerably. This 

corresponds with the HHA claims 

analysis published on page 35279 of the 

CY 2018 proposed rule (https://

www.gpo.gov/fdsys/pkg/FR-2017-07-28/ 

pdf/2017-15825.pdf), which shows that 

the number of visits per 60-day episode 

has decreased from 19.8 visits in 2010 

to 17.9 visits in 2016 for Medicare PPS. 

Medicare visits account for 

approximately 60 percent of total visits. 

The direct patient care contract labor 

costs are contract labor costs for skilled 

nursing, physical therapy, occupational 

therapy, speech therapy, and home 

health aide cost centers. We allocated 

these direct patient care contract labor 

costs to the Wages and Salaries and 

Benefits cost categories based on each 

provider’s relative proportions of both 

employee wages and salaries and 

employee benefits costs. For example, 

the direct patient care contract labor 

costs that are allocated to wages and 

salaries is equal to: (A) The employee 

wages and salaries costs as a percent of 

the sum of employee wages and salaries 

costs and employee benefits costs times; 

and (B) direct patient care contract labor 

costs. Nondirect patient care contract 

labor costs (such as contract labor costs 

reported in the Administrative and 

General cost center of the MCR) are 

captured in the ‘‘All Other’’ residual 

cost weight and later disaggregated into 

more detail as described below. This is 

a similar methodology that was 

implemented for the 2010-based home 

health market basket. 

We further divide the ‘‘All Other’’ 

residual cost weight estimated from the 

2016 Medicare cost report data into 

more detailed cost categories. To divide 

this cost weight we are proposing to use 

the 2007 Benchmark I–O ‘‘Use Tables/ 

Before Redefinitions/Purchaser Value’’ 

for NAICS 621600, Home Health 

Agencies, published by the BEA. These 

data are publicly available at http://

www.bea.gov/industry/io_annual.htm. 

The BEA Benchmark I–O data are 

generally scheduled for publication 

every five years. The most recent data 

available at the time of rebasing was for 

2007. The 2007 Benchmark I–O data are 

derived from the 2007 Economic Census 

and are the building blocks for BEA’s 

economic accounts. Therefore, they 

represent the most comprehensive and 

complete set of data on the economic 

processes or mechanisms by which 

output is produced and distributed.10

Besides Benchmark I–O estimates, BEA 

also produces Annual I–O estimates. 

While based on a similar methodology, 

the Annual I–O estimates reflect less 

comprehensive and less detailed data 

sources and are subject to revision when 

benchmark data become available. 

Instead of using the less detailed 

Annual I–O data, we are proposing to 

inflate the detailed 2007 Benchmark I– 

O data forward to 2016 by applying the 

annual price changes from the 

respective price proxies to the 

appropriate market basket cost 

categories that are obtained from the 

2007 Benchmark I–O data. We repeated 

this practice for each year. We then 

calculated the cost shares that each cost 


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category represents of the 2007 data 

inflated to 2016. These resulting 2016 

cost shares were applied to the ‘‘All 

Other’’ residual cost weight to obtain 

the detailed cost weights for the 

proposed 2016-based home health 

market basket. For example, the cost for 

Operations and Maintenance represents 

8.0 percent of the sum of the ‘‘All 

Other’’ 2007 Benchmark I–O HHA 

Expenditures inflated to 2016. 

Therefore, the Operations and 

Maintenance cost weight represents 8.0 

percent of the proposed 2016-based 

home health market basket’s ‘‘All 

Other’’ cost category (19.0 percent), 

yielding an Operations and 

Maintenance proposed cost weight of 

1.5 percent in the proposed 2016-based 

home health market basket (0.080 × 19.0 

percent = 1.5 percent). For the 2010- 

based home health market basket, we 

used the same methodology utilizing the 

2002 Benchmark I–O data (aged to 

2010). 

Using this methodology, we are 

proposing to derive nine detailed cost 

categories from the proposed 2016- 

based home health market basket ‘‘All 

Other’’ residual cost weight (19.0 

percent). These categories are: (1) 

Operations and Maintenance; (2) 

Administrative Support; (3) Financial 

Services; (4) Medical Supplies; (5) 

Rubber and Plastics; (6) Telephone; (7) 

Professional Fees; (8) Other Products; 

and (9) Other Services. The 2010-based 

home health market basket included a 

separate cost category for Postage; 

however, due to its small weight for the 

2016-based home health market basket, 

we propose to eliminate the stand-alone 

cost category for Postage and include 

these expenses in the Other Services 

cost category. 

Table 10 lists the proposed 2016- 

based home health market basket cost 

categories, cost weights, and price 

proxies. 

TABLE 10—COST CATEGORIES, WEIGHTS, AND PRICE PROXIES

IN PROPOSED 2016-BASED HOME HEALTH MARKET BASKET

Cost categories Weight Price proxy 

Compensation, including allocated contract services’ 

labor.

76.1 

Wages and Salaries, including allocated contract 

services’ labor.

65.1 Proposed Home Health Blended Wages and Salaries Index (2016). 

Benefits, including allocated contract services’ 

labor.

10.9 Proposed Home Health Blended Benefits Index (2016). 

Operations & Maintenance .............................................. 1.5 CPI–U for Fuel and utilities. 

Professional Liability Insurance ....................................... 0.3 CMS Physician Professional Liability Insurance Index. 

Administrative & General & Other Expenses including 

allocated contract services’ labor.

17.4 

Administrative Support ............................................. 1.0 ECI for Total compensation for Private industry workers in Office and 

administrative support. 

Financial Services .................................................... 1.9 ECI for Total compensation for Private industry workers in Financial 

activities. 

Medical Supplies ...................................................... 0.9 PPI Commodity data for Medical, surgical & personal aid devices. 

Rubber & Plastics .................................................... 1.6 PPI Commodity data for Rubber and plastic products. 

Telephone ................................................................ 0.7 CPI–U for Telephone services. 

Professional Fees .................................................... 5.3 ECI for Total compensation for Private industry workers in Professional and related. 

Other Products ......................................................... 2.8 PPI Commodity data for Finished goods less foods and energy. 

Other Services ......................................................... 3.2 ECI for Total compensation for Private industry workers in Service 

occupations. 

Transportation ................................................................. 2.6 CPI–U for Transportation. 

Capital-Related ................................................................ 2.1 

Fixed Capital ............................................................ 1.4 CPI–U for Owners’ equivalent rent of residences. 

Movable Capital ....................................................... 0.6 PPI Commodity data for Machinery and equipment. 

Total ......................................................................... * 100.0 

* Figures may not sum due to rounding. 

d. Proposed 2016-Based Home Health 

Market Basket Price Proxies 

After we computed the CY 2016 cost 

category weights for the proposed 

rebased home health market basket, we 

selected the most appropriate wage and 

price indexes to proxy the rate of change 

for each expenditure category. With the 

exception of the price index for 

Professional Liability Insurance costs, 

the proposed price proxies are based on 

Bureau of Labor Statistics (BLS) data 

and are grouped into one of the 

following BLS categories: 

• Employment Cost Indexes— 

Employment Cost Indexes (ECIs) 

measure the rate of change in employee 

wage rates and employer costs for 

employee benefits per hour worked. 

These indexes are fixed-weight indexes 

and strictly measure the change in wage 

rates and employee benefits per hour. 

They are not affected by shifts in skill 

mix. ECIs are superior to average hourly 

earnings as price proxies for input price 

indexes for two reasons: (a) They 

measure pure price change; and (b) they 

are available by occupational groups, 

not just by industry. 

• Consumer Price Indexes— 

Consumer Price Indexes (CPIs) measure 

change in the prices of final goods and 

services bought by the typical 

consumer. Consumer price indexes are 

used when the expenditure is more 

similar to that of a purchase at the retail 

level rather than at the wholesale level, 

or if no appropriate Producer Price 

Indexes (PPIs) were available. 

• Producer Price Indexes—PPIs 

measures average changes in prices 

received by domestic producers for their 

goods and services. PPIs are used to 

measure price changes for goods sold in 

other than retail markets. For example, 

a PPI for movable equipment is used 

rather than a CPI for equipment. PPIs in 

some cases are preferable price proxies 

for goods that HHAs purchase at 

wholesale levels. These fixed-weight 

indexes are a measure of price change 


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at the producer or at the intermediate 

stage of production. 

We evaluated the price proxies using 

the criteria of reliability, timeliness, 

availability, and relevance. Reliability 

indicates that the index is based on 

valid statistical methods and has low 

sampling variability. Widely accepted 

statistical methods ensure that the data 

were collected and aggregated in way 

that can be replicated. Low sampling 

variability is desirable because it 

indicates that sample reflects the typical 

members of the population. (Sampling 

variability is variation that occurs by 

chance because a sample was surveyed 

rather than the entire population.) 

Timeliness implies that the proxy is 

published regularly, preferably at least 

once a quarter. The market baskets are 

updated quarterly and therefore it is 

important the underlying price proxies 

be up-to-date, reflecting the most recent 

data available. We believe that using 

proxies that are published regularly 

helps ensure that we are using the most 

recent data available to update the 

market basket. We strive to use 

publications that are disseminated 

frequently because we believe that this 

is an optimal way to stay abreast of the 

most current data available. Availability 

means that the proxy is publicly 

available. We prefer that our proxies are 

publicly available because this will help 

ensure that our market basket updates 

are as transparent to the public as 

possible. In addition, this enables the 

public to be able to obtain the price 

proxy data on a regular basis. Finally, 

relevance means that the proxy is 

applicable and representative of the cost 

category weight to which it is applied. 

The CPIs, PPIs, and ECIs selected by us 

to be proposed in this regulation meet 

these criteria. Therefore, we believe that 

they continue to be the best measure of 

price changes for the cost categories to 

which they would be applied. 

As part of the revising and rebasing of 

the home health market basket, we are 

proposing to rebase the home health 

blended Wages and Salaries index and 

the home health blended Benefits index. 

We propose to use these blended 

indexes as price proxies for the Wages 

and Salaries and the Benefits portions of 

the proposed 2016-based home health 

market basket, as we did in the 2010- 

based home health market basket. A 

more detailed discussion is provided 

below. 

• Wages and Salaries: For measuring 

price growth in the 2016-based home 

health market basket, we are proposing 

to apply six price proxies to six 

occupational subcategories within the 

Wages and Salaries component, which 

would reflect the HHA occupational 

mix. This is the same approach used for 

the 2010-based index. We use a blended 

wage proxy because there is not a 

published wage proxy specific to the 

home health industry. 

We are proposing to continue to use 

the National Industry-Specific 

Occupational Employment and Wage 

estimates for North American Industrial 

Classification System (NAICS) 621600, 

Home Health Care Services, published 

by the BLS Office of Occupational 

Employment Statistics (OES) as the data 

source for the cost shares of the home 

health blended wage and benefits proxy. 

This is the same data source that was 

used for the 2010-based HHA blended 

wage and benefit proxies; however, we 

are proposing to use the May 2016 

estimates in place of the May 2010 

estimates. Detailed information on the 

methodology for the national industryspecific occupational employment and 

wage estimates survey can be found at 

http://www.bls.gov/oes/current/oes_

tec.htm. 

The needed data on HHA 

expenditures for the six occupational 

subcategories (Health-Related 

Professional and Technical, Non HealthRelated Professional and Technical, 

Management, Administrative, Health 

and Social Assistance Service, and 

Other Service Workers) for the wages 

and salaries component were tabulated 

from the May 2016 OES data for NAICS 

621600, Home Health Care Services. 

Table 11 compares the proposed 2016 

occupational assignments to the 2010 

occupational assignments of the six 

CMS designated subcategories. If an 

OES occupational classification does 

not exist in the 2010 or 2016 data we 

use ‘‘n/a.’’ 

TABLE 11—PROPOSED 2016 OCCUPATIONAL ASSIGNMENTS COMPARED TO 2010 OCCUPATIONAL ASSIGNMENTS FOR CMS 

HOME HEALTH WAGES AND SALARIES BLEND

2016 proposed occupational groupings 2010 occupational groupings 

Group 1 Health-related professional and technical Group 1 Health-related professional and technical 

n/a .................. n/a ................................................................................ 29–1021 ......... Dentists, General. 

29–1031 ......... Dietitians and Nutritionists ........................................... 29–1031 ......... Dietitians and Nutritionists. 

29–1051 ......... Pharmacists .................................................................. 29–1051 ......... Pharmacists. 

29–1062 ......... Family and General Practitioners ................................ 29–1062 ......... Family and General Practitioners. 

29–1063 ......... Internists, General ........................................................ 29–1063 ......... Internists, General.

29–1065 ......... Pediatricians, General .................................................. n/a .................. n/a. 

29–1066 ......... Psychiatrists ................................................................. n/a .................. n/a. 

29–1069 ......... Physicians and Surgeons, All Other ............................ 29–1069 ......... Physicians and Surgeons, All Other. 

29–1071 ......... Physician Assistants .................................................... 29–1071 ......... Physician Assistants. 

n/a .................. n/a ................................................................................ 29–1111 ......... Registered Nurses. 

29–1122 ......... Occupational Therapists .............................................. 29–1122 ......... Occupational Therapists. 

29–1123 ......... Physical Therapists ...................................................... 29–1123 ......... Physical Therapists. 

29–1125 ......... Recreational Therapists ............................................... 29–1125 ......... Recreational Therapists. 

29–1126 ......... Respiratory Therapists ................................................. 29–1126 ......... Respiratory Therapists. 

29–1127 ......... Speech-Language Pathologists ................................... 29–1127 ......... Speech-Language Pathologists. 

29–1129 ......... Therapists, All Other .................................................... 29–1129 ......... Therapists, All Other.

29–1141 ......... Registered Nurses ....................................................... n/a .................. n/a. 

29–1171 ......... Nurse Practitioners ....................................................... n/a .................. n/a. 

29–1199 ......... Health Diagnosing and Treating Practitioners, All 

Other.

29–1199 ......... Health Diagnosing and Treating Practitioners, All 

Other. 


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2016 proposed occupational groups 2010 occupational groupings 

Group 2 Non health related professional & technical Group 2 Non health related professional & technical 

13–0000 ......... Business and Financial Operations Occupations ........ 13–0000 ......... Business and Financial Operations Occupations. 

15–0000 ......... Computer and Mathematical Occupations ................... 15–0000 ......... Computer and Mathematical Science Occupations. 

n/a .................. n/a ................................................................................ 17–0000 ......... Architecture and Engineering Occupations. 

19–0000 ......... Life, Physical, and Social Science Occupations .......... 19–0000 ......... Life, Physical, and Social Science Occupations. 

n/a .................. n/a ................................................................................ 23–0000 ......... Legal Occupations. 

25–0000 ......... Education, Training, and Library Occupations ............. 25–0000 ......... Education, Training, and Library Occupations. 

27–0000 ......... Arts, Design, Entertainment, Sports, and Media Occupations.27–0000 ......... Arts, Design, Entertainment, Sports, and Media Occupations. 

Group 3 Management Group 3 Management 

11–0000 ......... Management Occupations ........................................... 11–0000 ......... Management Occupations. 

Group 4 Administrative Group 4 Administrative 

43–0000 ......... Office and Administrative Support Occupations .......... 43–0000 ......... Office and Administrative Support Occupations. 

Group 5 Health and social assistance services Group 5 Health and social assistance services 

21–0000 ......... Community and Social Service Occupations ............... 21–0000 ......... Community and Social Services Occupations. 

29–2011 ......... Medical and Clinical Laboratory Technologists ........... 29–2011 ......... Medical and Clinical Laboratory Technologists. 

29–2012 ......... Medical and Clinical Laboratory Technicians .............. 29–2012 ......... Medical and Clinical Laboratory Technicians. 

29–2021 ......... Dental Hygienists ......................................................... 29–2021 ......... Dental Hygienists. 

29–2032 ......... Diagnostic Medical Sonographers ............................... 29–2032 ......... Diagnostic Medical Sonographers. 

29–2034 ......... Radiologic Technologists ............................................. 29–2034 ......... Radiologic Technologists and Technicians. 

29–2041 ......... Emergency Medical Technicians and Paramedics ...... 29–2041 ......... Emergency Medical Technicians and Paramedics.

29–2051 ......... Dietetic Technicians ..................................................... 29–2051 ......... Dietetic Technicians. 

29–2052 ......... Pharmacy Technicians ................................................. 29–2052 ......... Pharmacy Technicians. 

29–2053 ......... Psychiatric Technicians ................................................ n/a .................. n/a. 

29–2054 ......... Respiratory Therapy Technicians ................................ 29–2054 ......... Respiratory Therapy Technicians.

29–2055 ......... Surgical Technologists ................................................. n/a .................. n/a. 

29–2061 ......... Licensed Practical and Licensed Vocational Nurses ... 29–2061 ......... Licensed Practical and Licensed Vocational Nurses. 

29–2071 ......... Medical Records and Health Information Technicians 29–2071 ......... Medical Records and Health Information Technicians. 

29–2099 ......... Health Technologists and Technicians, All Other ........ 29–2099 ......... Health Technologists and Technicians, All Other. 

n/a .................. n/a ................................................................................ 29–9012 ......... Occupational Health and Safety Technicians. 

29–9099 ......... Healthcare Practitioners and Technical Workers, All 

Other.

29–9099 ......... Healthcare Practitioner and Technical Workers, All 

Other. 

31–0000 ......... Healthcare Support Occupations ................................. 31–0000 ......... Healthcare Support Occupations. 

Group 6 Other service workers Group 6 Other service workers 

33–0000 ......... Protective Service Occupations ................................... 33–0000 ......... Protective Service Occupations. 

35–0000 ......... Food Preparation and Serving Related Occupations .. 35–0000 ......... Food Preparation and Serving Related Occupations. 

37–0000 ......... Building and Grounds Cleaning and Maintenance Occupations.37–0000 ......... Building and Grounds Cleaning and Maintenance Occupations. 

39–0000 ......... Personal Care and Service Occupations ..................... 39–0000 ......... Personal Care and Service Occupations. 

41–0000 ......... Sales and Related Occupations .................................. 41–0000 ......... Sales and Related Occupations. 

47–0000 ......... Construction and Extraction Occupations .................... n/a .................. n/a. 

49–0000 ......... Installation, Maintenance, and Repair Occupations .... 49–0000 ......... Installation, Maintenance, and Repair Occupations. 

51–0000 ......... Production Occupations ............................................... 51–0000 ......... Production Occupations. 

53–0000 ......... Transportation and Material Moving Occupations ....... 53–0000 ......... Transportation and Material Moving Occupations. 

Total expenditures by occupation 

were calculated by taking the OES 

number of employees multiplied by the 

OES annual average salary for each 

subcategory, and then calculating the 

proportion of total wage costs that each 

subcategory represents. The proportions 

listed in Table 12 represent the Wages 

and Salaries blend weights. 

TABLE 12—COMPARISON OF THE PROPOSED 2016-BASED HOME HEALTH WAGES AND SALARIES BLEND AND THE 2010- 

BASED HOME HEALTH WAGES AND SALARIES BLEND

Cost subcategory Proposed 

2016 weight 2010 weight Price proxy BLS series ID 

Health-Related Professional and 

Technical.

33.7 33.4 ECI for Wages and salaries for All Civilian workers in Hospitals.CIU1026220000000I. 

Non Health-Related Professional 

and Technical.

2.3 2.3 ECI for Wages and salaries for Private industry 

workers in Professional, scientific, and technical services.

CIU2025400000000I. 

Management ................................ 7.6 8.3 ECI for Wages and salaries for Private industry 

workers in Management, business, and financial.

CIU2020000110000I. 


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TABLE 12—COMPARISON OF THE PROPOSED 2016-BASED HOME HEALTH WAGES AND SALARIES BLEND AND THE 2010- 

BASED HOME HEALTH WAGES AND SALARIES BLEND—Continued 

Cost subcategory Proposed 

2016 weight 2010 weight Price proxy BLS series ID 

Administrative .............................. 6.7 7.7 ECI for Wages and salaries for Private industry 

workers in Office and administrative support.

CIU2020000220000I. 

Health and Social Assistance 

Services.

35.3 35.8 ECI for Wages and salaries for All Civilian workers in Health care and social assistance.CIU1026200000000I. 

Other Service Occupations ......... 14.4 12.6 ECI for Wages and salaries for Private industry 

workers in Service occupations.

CIU2020000300000I. 

Total * .................................... 100.0 100.0 

* Totals may not sum due to rounding. 

A comparison of the yearly changes 

from CY 2016 to CY 2019 for the 2010- 

based home health Wages and Salaries 

blend and the proposed 2016-based 

home health Wages and Salaries blend 

is shown in Table 13. The annual 

increases in the two price proxies are 

the same when rounded to one decimal 

place. 

TABLE 13—ANNUAL GROWTH IN PROPOSED 2016 AND 2010 HOME HEALTH WAGES AND SALARIES BLEND

2016 2017 2018 2019 

Wage Blend 2016 ............................................................................................ 2.3 2.5 2.6 3.0 

Wage Blend 2010 ............................................................................................ 2.3 2.5 2.6 3.0 

Source: IHS Global Insight Inc. 1st Quarter 2018 forecast with historical data through 4th Quarter 2017. 

• Benefits: For measuring Benefits 

price growth in the proposed 2016- 

based home health market basket, we 

are proposing to apply applicable price 

proxies to the six occupational 

subcategories that are used for the 

Wages and Salaries blend. The proposed 

six categories in Table 14 are the same 

as those in the 2010-based home health 

market basket and include the same 

occupational mix as listed in Table 14. 

TABLE 14—COMPARISON OF THE PROPOSED 2016-BASED HOME HEALTH BENEFITS BLEND AND 2010-BASED HOME

HEALTH BENEFITS BLEND

Cost category Proposed 

2016 weight 2010 weight Price proxy 

Health-Related Professional and Technical 33.9 33.5 ECI for Benefits for All Civilian workers in Hospitals. 

Non Health-Related Professional and 

Technical.

2.3 2.2 ECI for Benefits for Private industry workers in Professional, scientific, and technical services. 

Management ............................................... 7.3 8.0 ECI for Benefits for Private industry workers in Management, 

business, and financial. 

Administrative .............................................. 6.7 7.8 ECI for Benefits for Private industry workers in Office and administrative support. 

Health and Social Assistance Services ...... 35.5 35.9 ECI for Benefits for All Civilian workers in Health care and social 

assistance. 

Other Service Workers ................................ 14.2 12.5 ECI for Benefits for Private industry workers in Service occupations. 

Total * ................................................... 100.0 100.0 

* Totals may not sum due to rounding. 

There is no available data source that 

exists for benefit expenditures by 

occupation for the home health 

industry. Thus, to construct weights for 

the home health benefits blend we 

calculated the ratio of benefits to wages 

and salaries for CY 2016 for the six ECI 

series we are proposing to use in the 

blended ‘wages and salaries’ and 

‘benefits’ indexes. To derive the relevant 

benefits weight, we applied the benefitto-wage ratios to each of the six 

occupational subcategories from the 

2016 OES wage and salary weights, and 

normalized. For example, the ratio of 

benefits to wages from the 2016 home 

health wages and salaries blend and the 

benefits blend for the management 

category is 0.984. We apply this ratio to 

the 2016 OES weight for wages and 

salaries for management, 7.6 percent, 

and then normalize those weights 

relative to the other five benefit 

occupational categories to obtain a 

benefit weight for management of 7.3 

percent. 

A comparison of the yearly changes 

from CY 2016 to CY 2019 for the 2010- 

based home health Benefits blend and 

the proposed 2016-based home health 

Benefits blend is shown in Table 15. 

With the exception of a 0.1 percentage 

point difference in 2019, the annual 

increases in the two price proxies are 

the same when rounded to one decimal 

place. 


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TABLE 15—ANNUAL GROWTH IN THE PROPOSED 2016 HOME HEALTH BENEFITS BLEND AND THE 2010 HOME HEALTH

BENEFITS BLEND

2016 2017 2018 2019 

Benefits Blend 2016 ........................................................................................ 1.7 1.9 2.4 3.0 

Benefits Blend 2010 ........................................................................................ 1.7 1.9 2.4 2.9 

Source: IHS Global Insight Inc. 1st Quarter 2018 forecast with historical data through 4th Quarter 2017. 

• Operations and Maintenance: We 

are proposing to use CPI U.S. city 

average for Fuel and utilities (BLS series 

code #CUUR0000SAH2) to measure 

price growth of this cost category. The 

same proxy was used for the 2010-based 

home health market basket. 

• Professional Liability Insurance: We 

are proposing to use the CMS Physician 

Professional Liability Insurance price 

index to measure price growth of this 

cost category. The same proxy was used 

for the 2010-based home health market 

basket. 

To accurately reflect the price changes 

associated with physician PLI, each year 

we collect PLI premium data for 

physicians from a representative sample 

of commercial carriers and publically 

available rate filings as maintained by 

each State’s Association of Insurance 

Commissioners. As we require for our 

other price proxies, the PLI price proxy 

is intended to reflect the pure price 

change associated with this particular 

cost category. Thus, the level of liability 

coverage is held constant from year to 

year. To accomplish this, we obtain 

premium information from a sample of 

commercial carriers for a fixed level of 

coverage, currently $1 million per 

occurrence and a $3 million annual 

limit. This information is collected for 

every State by physician specialty and 

risk class. Finally, the State-level, 

physician-specialty data are aggregated 

to compute a national total, using 

counts of physicians by State and 

specialty as provided in the AMA 

publication, Physician Characteristics 

and Distribution in the U.S. 

• Administrative and Support: We are 

proposing to use the ECI for Total 

compensation for Private industry 

workers in Office and administrative 

support (BLS series code 

#CIU2010000220000I) to measure price 

growth of this cost category. The same 

proxy was used for the 2010-based 

home health market basket. 

• Financial Services: We are 

proposing to use the ECI for Total 

compensation for Private industry 

workers in Financial activities (BLS 

series code #CIU201520A000000I) to 

measure price growth of this cost 

category. The same proxy was used for 

the 2010-based home health market 

basket. 

• Medical Supplies: We are proposing 

to use the PPI Commodity data for 

Miscellaneous products-Medical, 

surgical & personal aid devices (BLS 

series code #WPU156) to measure price 

growth of this cost category. The same 

proxy was used for the 2010-based 

home health market basket. 

• Rubber and Plastics: We are 

proposing to use the PPI Commodity 

data for Rubber and plastic products 

(BLS series code #WPU07) to measure 

price growth of this cost category. The 

same proxy was used for the 2010-based 

home health market basket. 

• Telephone: We are proposing to use 

CPI U.S. city average for Telephone 

services (BLS series code 

#CUUR0000SEED) to measure price 

growth of this cost category. The same 

proxy was used for the 2010-based 

home health market basket. 

• Professional Fees: We are proposing 

to use the ECI for Total compensation 

for Private industry workers in 

Professional and related (BLS series 

code #CIS2010000120000I) to measure 

price growth of this category. The same 

proxy was used for the 2010-based 

home health market basket. 

• Other Products: We are proposing 

to use the PPI Commodity data for Final 

demand-Finished goods less foods and 

energy (BLS series code #WPUFD4131) 

to measure price growth of this category. 

The same proxy was used for the 2010- 

based home health market basket. 

• Other Services: We are proposing to 

use the ECI for Total compensation for 

Private industry workers in Service 

occupations (BLS series code 

#CIU2010000300000I) to measure price 

growth of this category. The same proxy 

was used for the 2010-based home 

health market basket. 

• Transportation: We are proposing 

to use the CPI U.S. city average for 

Transportation (BLS series code 

#CUUR0000SAT) to measure price 

growth of this category. The same proxy 

was used for the 2010-based home 

health market basket. 

• Fixed capital: We are proposing to 

use the CPI U.S. city average for 

Owners’ equivalent rent of residences 

(BLS series code #CUUS0000SEHC) to 

measure price growth of this cost 

category. The same proxy was used for 

the 2010-based home health market 

basket. 

• Movable Capital: We are proposing 

to use the PPI Commodity data for 

Machinery and equipment (BLS series 

code #WPU11) to measure price growth 

of this cost category. The same proxy 

was used for the 2010-based home 

health market basket. 

e. Rebasing Results 

A comparison of the yearly changes 

from CY 2014 to CY 2021 for the 2010- 

based home health market basket and 

the proposed 2016-based home health 

market basket is shown in Table 16. 

TABLE 16—COMPARISON OF THE 2010-BASED HOME HEALTH MARKET BASKET AND THE PROPOSED 2016-BASED HOME

HEALTH MARKET BASKET, PERCENT CHANGE, 2014–2021 

Home health 

market 

basket, 

2010-based 

Proposed 

home health 

market 

basket, 

2016-based 

Difference 

(proposed 

2016-based 

less 

2010-based) 

Historical data: 

CY 2014 ................................................................................................................................ 1.6 1.6 0.0 

CY 2015 ................................................................................................................................ 1.6 1.5 ¥0.1 

CY 2016 ................................................................................................................................ 2.0 2.0 0.0 

CY 2017 ................................................................................................................................ 2.3 2.3 0.0 


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TABLE 16—COMPARISON OF THE 2010-BASED HOME HEALTH MARKET BASKET AND THE PROPOSED 2016-BASED HOME

HEALTH MARKET BASKET, PERCENT CHANGE, 2014–2021—Continued 

Home health 

market 

basket, 

2010-based 

Proposed 

home health 

market 

basket, 

2016-based 

Difference 

(proposed 

2016-based 

less 

2010-based) 

Average CYs 2014–2017 .............................................................................................. 1.9 1.9 0.0 

Forecast: 

CY 2018 ................................................................................................................................ 2.5 2.5 0.0 

CY 2019 ................................................................................................................................ 2.8 2.8 0.0 

CY 2020 ................................................................................................................................ 3.0 3.0 0.0 

CY 2021 ................................................................................................................................ 3.0 3.0 0.0 

Average CYs 2018–2021 .............................................................................................. 2.8 2.8 0.0 

Source: IHS Global Inc. 1st Quarter 2018 forecast with historical data through 4th Quarter 2017. 

Table 16 shows that the forecasted 

rate of growth for CY 2019 for the 

proposed 2016-based home health 

market basket is 2.8 percent, the same 

rate of growth as estimated using the 

2010-based home health market basket; 

other forecasted years also show a 

similar increase. Similarly, the 

historical estimates of the growth in the 

2016-based and 2010-based home health 

market basket are the same except for 

CY 2015 where the 2010-based home 

health market basket is 0.1 percentage 

point higher. We note that if more 

recent data are subsequently available 

(for example, a more recent estimate of 

the market basket), we would use such 

data to determine the market basket 

increases in the final rule. 

f. Labor-Related Share 

Effective for CY 2019, we are 

proposing to revise the labor-related 

share to reflect the proposed 2016-based 

home health market basket 

Compensation (Wages and Salaries plus 

Benefits) cost weight. The current laborrelated share is based on the 

Compensation cost weight of the 2010- 

based home health market basket. Based 

on the proposed 2016-based home 

health market basket, the labor-related 

share would be 76.1 percent and the 

proposed non-labor-related share would 

be 23.9 percent. The labor-related share 

for the 2010-based home health market 

basket was 78.5 percent and the nonlabor-related share was 21.5 percent. As 

explained earlier, the decrease in the 

compensation cost weight of 2.4 

percentage points is attributable to both 

employed compensation (wages and 

salaries and benefits for employees) and 

direct patient care contract labor costs 

as reported in the MCR data. Table 17 

details the components of the laborrelated share for the 2010-based and 

proposed 2016-based home health 

market baskets. 

TABLE 17—LABOR–RELATED SHARE OF CURRENT AND PROPOSED HOME HEALTH MARKET BASKETS

Cost category 

2010-based 

market basket 

weight 

Proposed 

2016-based 

market basket 

weight 

Wages and Salaries ................................................................................................................................................ 66.3 65.1 

Employee Benefits ................................................................................................................................................... 12.2 11.0 

Total Labor-Related ................................................................................................................................................. 78.5 76.1 

Total Non Labor-Related ......................................................................................................................................... 21.5 23.9 

We propose to implement the 

proposed revision to the labor-related 

share of 76.1 percent in a budget neutral 

manner. This proposal would be 

consistent with our policy of 

implementing the annual recalibration 

of the case-mix weights and update of 

the home health wage index in a budget 

neutral manner. 

g. Multifactor Productivity 

In the CY 2015 HHA PPS final rule 

(79 FR 38384 through 38384), we 

finalized our methodology for 

calculating and applying the MFP 

adjustment. As we explained in that 

rule, section 1895(b)(3)(B)(vi) of the Act, 

requires that, in CY 2015 (and in 

subsequent calendar years, except CY 

2018 (under section 411(c) of the 

Medicare Access and CHIP 

Reauthorization Act of 2015 (MACRA) 

(Pub. L. 114–10, enacted April 16, 

2015)), the market basket percentage 

under the HHA prospective payment 

system as described in section 

1895(b)(3)(B) of the Act be annually 

adjusted by changes in economy-wide 

productivity. Section 

1886(b)(3)(B)(xi)(II) of the Act defines 

the productivity adjustment to be equal 

to the 10-year moving average of change 

in annual economy-wide private 

nonfarm business multifactor 

productivity (MFP) (as projected by the 

Secretary for the 10-year period ending 

with the applicable fiscal year, calendar 

year, cost reporting period, or other 

annual period) (the ‘‘MFP adjustment’’). 

The Bureau of Labor Statistics (BLS) is 

the agency that publishes the official 

measure of private nonfarm business 

MFP. Please see http://www.bls.gov/ 

mfp, to obtain the BLS historical 

published MFP data. 

Based on IHS Global Inc.’s (IGI’s) first 

quarter 2018 forecast with history 

through the fourth quarter of 2017, the 

projected MFP adjustment (the 10-year 

moving average of MFP for the period 

ending December 31, 2019) for CY 2019 

is 0.7 percent. IGI is a nationally 

recognized economic and financial 

forecasting firm that contracts with CMS 

to forecast the components of the market 

baskets. We note that if more recent data 

are subsequently available (for example, 

a more recent estimate of the MFP 

adjustment), we would use such data to 

determine the MFP adjustment in the 

final rule. 


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11 ‘‘Revised Delineations of Metropolitan 

Statistical Areas, Micropolitan Statistical Areas, and 

Combined Statistical Areas, and Guidance on Uses 

of the Delineations of These Areas’’. OMB 

BULLETIN NO. 17–01. August 15, 2017. https://

www.whitehouse.gov/sites/whitehouse.gov/files/ 

omb/bulletins/2017/b-17-01.pdf. 

12 ‘‘Revised Delineations of Metropolitan 

Statistical Areas, Micropolitan Statistical Areas, and 

Combined Statistical Areas, and Guidance on Uses 

of the Delineations of These Areas’’. OMB 

BULLETIN NO. 18–03. April 10, 2018. https://

www.whitehouse.gov/wp-content/uploads/2018/04/ 

OMB-BULLETIN-NO.-18-03-Final.pdf. 

2. Proposed CY 2019 Market Basket 

Update for HHAs 

Using IGI’s first quarter 2018 forecast, 

the MFP adjustment for CY 2019 is 

projected to be 0.7 percent. In 

accordance with section 

1895(b)(3)(B)(iii) of the Act, we propose 

to base the CY 2019 market basket 

update, which is used to determine the 

applicable percentage increase for HHA 

payments, on the most recent estimate 

of the proposed 2016-based home health 

market basket. Based on IGI’s first 

quarter 2018 forecast with history 

through the fourth quarter of 2017, the 

projected increase of the proposed 2016- 

based home health market basket for CY 

2019 is 2.8 percent. We propose to then 

reduce this percentage increase by the 

current estimate of the MFP adjustment 

for CY 2019 of 0.7 percentage point in 

accordance with 1895(b)(3)(B)(vi) of the 

Act. Therefore, the current estimate of 

the CY 2019 HHA payment update is 2.1 

percent (2.8 percent market basket 

update, less 0.7 percentage point MFP 

adjustment). Furthermore, we note that 

if more recent data are subsequently 

available (for example, a more recent 

estimate of the market basket and MFP 

adjustment), we would use such data to 

determine the CY 2019 market basket 

update and MFP adjustment in the final 

rule. 

Section 1895(b)(3)(B)(v) of the Act 

requires that the home health update be 

decreased by 2 percentage points for 

those HHAs that do not submit quality 

data as required by the Secretary. For 

HHAs that do not submit the required 

quality data for CY 2019, the home 

health payment update will be 0.1 

percent (2.1 percent minus 2 percentage 

points). 

3. CY 2019 Home Health Wage Index 

Sections 1895(b)(4)(A)(ii) and (b)(4)(C) 

of the Act require the Secretary to 

provide appropriate adjustments to the 

proportion of the payment amount 

under the HH PPS that account for area 

wage differences, using adjustment 

factors that reflect the relative level of 

wages and wage-related costs applicable 

to the furnishing of HH services. Since 

the inception of the HH PPS, we have 

used inpatient hospital wage data in 

developing a wage index to be applied 

to HH payments. We propose to 

continue this practice for CY 2019, as 

we continue to believe that, in the 

absence of HH-specific wage data that 

accounts for area differences, using 

inpatient hospital wage data is 

appropriate and reasonable for the HH 

PPS. Specifically, we propose to 

continue to use the pre-floor, prereclassified hospital wage index as the 

wage adjustment to the labor portion of 

the HH PPS rates. For CY 2019, the 

updated wage data are for hospital cost 

reporting periods beginning on or after 

October 1, 2014, and before October 1, 

2015 (FY 2015 cost report data). We 

apply the appropriate wage index value 

to the labor portion of the HH PPS rates 

based on the site of service for the 

beneficiary (defined by section 1861(m) 

of the Act as the beneficiary’s place of 

residence). 

To address those geographic areas in 

which there are no inpatient hospitals, 

and thus, no hospital wage data on 

which to base the calculation of the CY 

2019 HH PPS wage index, we propose 

to continue to use the same 

methodology discussed in the CY 2007 

HH PPS final rule (71 FR 65884) to 

address those geographic areas in which 

there are no inpatient hospitals. For 

rural areas that do not have inpatient 

hospitals, we propose to use the average 

wage index from all contiguous Core 

Based Statistical Areas (CBSAs) as a 

reasonable proxy. Currently, the only 

rural area without a hospital from which 

hospital wage data could be derived is 

Puerto Rico. However, for rural Puerto 

Rico, we do not apply this methodology 

due to the distinct economic 

circumstances that exist there (for 

example, due to the close proximity to 

one another of almost all of Puerto 

Rico’s various urban and non-urban 

areas, this methodology would produce 

a wage index for rural Puerto Rico that 

is higher than that in half of its urban 

areas). Instead, we propose to continue 

to use the most recent wage index 

previously available for that area. For 

urban areas without inpatient hospitals, 

we use the average wage index of all 

urban areas within the state as a 

reasonable proxy for the wage index for 

that CBSA. For CY 2019, the only urban 

area without inpatient hospital wage 

data is Hinesville, GA (CBSA 25980). 

On February 28, 2013, OMB issued 

Bulletin No. 13–01, announcing 

revisions to the delineations of MSAs, 

Micropolitan Statistical Areas, and 

CBSAs, and guidance on uses of the 

delineation of these areas. In the CY 

2015 HH PPS final rule (79 FR 66085 

through 66087), we adopted the OMB’s 

new area delineations using a 1-year 

transition. 

On August 15, 2017, OMB issued 

Bulletin No. 17–01 in which it 

announced that one Micropolitan 

Statistical Area, Twin Falls, Idaho, now 

qualifies as a Metropolitan Statistical 

Area. The new CBSA (46300) comprises 

the principal city of Twin Falls, Idaho 

in Jerome County, Idaho and Twin Falls 

County, Idaho. The CY 2019 HH PPS 

wage index value for CBSA 46300, Twin 

Falls, Idaho, will be 0.8335. Bulletin No. 

17–01 is available at https://

www.whitehouse.gov/sites/ 

whitehouse.gov/files/omb/bulletins/ 

2017/b-17-01.pdf.11

The most recent OMB Bulletin (No. 

18–03) was published on April 10, 2018 

and is available at https://

www.whitehouse.gov/wp-content/ 

uploads/2018/04/OMB-BULLETIN-NO.- 

18-03-Final.pdf.12 The revisions 

contained in OMB Bulletin No. 18–03 

have no impact on the geographic area 

delineations that are used to wage adjust 

HH PPS payments. 

The CY 2019 wage index is available 

on the CMS website at http://

www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/HomeHealthPPS/ 

Home-Health-Prospective-PaymentSystem-Regulations-and-Notices.html. 

4. CY 2019 Annual Payment Update 

a. Background 

The Medicare HH PPS has been in 

effect since October 1, 2000. As set forth 

in the July 3, 2000 final rule (65 FR 

41128), the base unit of payment under 

the Medicare HH PPS is a national, 

standardized 60-day episode payment 

rate. As set forth in § 484.220, we adjust 

the national, standardized 60-day 

episode payment rate by a case-mix 

relative weight and a wage index value 

based on the site of service for the 

beneficiary. 

To provide appropriate adjustments to 

the proportion of the payment amount 

under the HH PPS to account for area 

wage differences, we apply the 

appropriate wage index value to the 

labor portion of the HH PPS rates. As 

discussed in section III.C.1 of this 

proposed rule, based on the proposed 

2016-based home health market basket, 

the proposed labor-related share would 

be 76.1 percent and the proposed nonlabor-related share would be 23.9 

percent for CY 2019. The CY 2019 HH 

PPS rates use the same case-mix 

methodology as set forth in the CY 2008 

HH PPS final rule with comment period 

(72 FR 49762) and will be adjusted as 

described in section III.B of this 

proposed rule. The following are the 

steps we take to compute the case-mix 


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and wage-adjusted 60-day episode rate 

for CY 2019: 

• Multiply the national 60-day 

episode rate by the patient’s applicable 

case-mix weight. 

• Divide the case-mix adjusted 

amount into a labor (76.1 percent) and 

a non-labor portion (23.9 percent). 

• Multiply the labor portion by the 

applicable wage index based on the site 

of service of the beneficiary. 

• Add the wage-adjusted portion to 

the non-labor portion, yielding the casemix and wage adjusted 60-day episode 

rate, subject to any additional applicable 

adjustments. 

In accordance with section 

1895(b)(3)(B) of the Act, we propose the 

annual update of the HH PPS rates. 

Section 484.225 sets forth the specific 

annual percentage update methodology. 

In accordance with § 484.225(i), for a 

HHA that does not submit HH quality 

data, as specified by the Secretary, the 

unadjusted national prospective 60-day 

episode rate is equal to the rate for the 

previous calendar year increased by the 

applicable HH market basket index 

amount minus 2 percentage points. Any 

reduction of the percentage change 

would apply only to the calendar year 

involved and would not be considered 

in computing the prospective payment 

amount for a subsequent calendar year. 

Medicare pays the national, 

standardized 60-day case-mix and wageadjusted episode payment on a split 

percentage payment approach. The split 

percentage payment approach includes 

an initial percentage payment and a 

final percentage payment as set forth in 

§ 484.205(b)(1) and (b)(2). We may base 

the initial percentage payment on the 

submission of a request for anticipated 

payment (RAP) and the final percentage 

payment on the submission of the claim 

for the episode, as discussed in § 409.43. 

The claim for the episode that the HHA 

submits for the final percentage 

payment determines the total payment 

amount for the episode and whether we 

make an applicable adjustment to the 

60-day case-mix and wage-adjusted 

episode payment. The end date of the 

60-day episode as reported on the claim 

determines which calendar year rates 

Medicare will use to pay the claim. 

We may also adjust the 60-day casemix and wage-adjusted episode 

payment based on the information 

submitted on the claim to reflect the 

following: 

• A low-utilization payment 

adjustment (LUPA) is provided on a pervisit basis as set forth in §§ 484.205(c) 

and 484.230. 

• A partial episode payment (PEP) 

adjustment as set forth in §§ 484.205(d) 

and 484.235. 

• An outlier payment as set forth in 

§§ 484.205(e) and 484.240. 

b. CY 2019 National, Standardized 60- 

Day Episode Payment Rate 

Section 1895(b)(3)(A)(i) of the Act 

requires that the 60-day episode base 

rate and other applicable amounts be 

standardized in a manner that 

eliminates the effects of variations in 

relative case-mix and area wage 

adjustments among different home 

health agencies in a budget neutral 

manner. To determine the CY 2019 

national, standardized 60-day episode 

payment rate, we apply a wage index 

budget neutrality factor and a case-mix 

budget neutrality factor described in 

section III.B of this proposed rule; and 

the home health payment update 

percentage discussed in section III.C.2 

of this proposed rule. 

To calculate the wage index budget 

neutrality factor, we simulated total 

payments for non-LUPA episodes using 

the CY 2019 wage index (including the 

application of the proposed laborrelated share of 76.1 percent and the 

proposed non-labor-related share of 23.9 

percent) and compared it to our 

simulation of total payments for nonLUPA episodes using the CY 2018 wage 

index and CY 2018 (including the 

application of the current labor-related 

share of 78.535 percent and the nonlabor-related of 21.465). By dividing the 

total payments for non-LUPA episodes 

using the CY 2019 wage index by the 

total payments for non-LUPA episodes 

using the CY 2018 wage index, we 

obtain a wage index budget neutrality 

factor of 0.9991. We would apply the 

wage index budget neutrality factor of 

0.9991 to the calculation of the CY 2019 

national, standardized 60-day episode 

payment rate. 

As discussed in section III.B of this 

proposed rule, to ensure the changes to 

the case-mix weights are implemented 

in a budget neutral manner, we propose 

to apply a case-mix weight budget 

neutrality factor to the CY 2019 

national, standardized 60-day episode 

payment rate. The case-mix weight 

budget neutrality factor is calculated as 

the ratio of total payments when CY 

2019 case-mix weights are applied to CY 

2017 utilization (claims) data to total 

payments when CY 2018 case-mix 

weights are applied to CY 2017 

utilization data. The case-mix budget 

neutrality factor for CY 2019 is 1.0163 

as described in section III.B of this 

proposed rule. 

Next, we would update the payment 

rates by the CY 2019 home health 

payment update percentage of 2.1 

percent as described in section III.C.2 of 

this proposed rule. The CY 2019 

national, standardized 60-day episode 

payment rate is calculated in Table 18. 

TABLE 18—CY 2019 60-DAY NATIONAL, STANDARDIZED 60-DAY EPISODE PAYMENT AMOUNT

CY 2018 national, standardized 60-day episode payment 

Wage index 

budget 

neutrality 

factor 

Case-mix 

weights 

budget 

neutrality 

factor 

CY 2019 HH 

payment 

update 

CY 2019 

National, 

standardized 

60-day 

episode 

payment 

$3,039.64 .......................................................................................................... × 0.9991 × 1.0163 × 1.021 $3,151.22 

The CY 2019 national, standardized 

60-day episode payment rate for an 

HHA that does not submit the required 

quality data is updated by the CY 2019 

home health payment update of 2.1 

percent minus 2 percentage points and 

is shown in Table 19. 


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TABLE 19—CY 2019 NATIONAL, STANDARDIZED 60-DAY EPISODE PAYMENT AMOUNT FOR HHAS THAT DO NOT SUBMIT

THE QUALITY DATA

CY 2018 national, standardized 60-day episode payment 

Wage index 

budget 

neutrality 

factor 

Case-mix 

weights 

budget 

neutrality 

factor 

CY 2019 

HH payment 

update minus 

2 percentage 

points 

CY 2019 

National, 

standardized 

60-day 

episode 

payment 

$3,039.64 .......................................................................................................... × 0.9991 × 1.0163 × 1.001 $3,089.49 

c. CY 2019 National Per-Visit Rates 

The national per-visit rates are used to 

pay LUPAs (episodes with four or fewer 

visits) and are also used to compute 

imputed costs in outlier calculations. 

The per-visit rates are paid by type of 

visit or HH discipline. The six HH 

disciplines are as follows: 

• Home health aide (HH aide). 

• Medical Social Services (MSS). 

• Occupational therapy (OT). 

• Physical therapy (PT). 

• Skilled nursing (SN). 

• Speech-language pathology (SLP). 

To calculate the CY 2019 national pervisit rates, we started with the CY 2018 

national per-visit rates. Then we applied 

a wage index budget neutrality factor to 

ensure budget neutrality for LUPA pervisit payments. We calculated the wage 

index budget neutrality factor by 

simulating total payments for LUPA 

episodes using the CY 2019 wage index 

and comparing it to simulated total 

payments for LUPA episodes using the 

CY 2018 wage index. By dividing the 

total payments for LUPA episodes using 

the CY 2019 wage index by the total 

payments for LUPA episodes using the 

CY 2018 wage index, we obtained a 

wage index budget neutrality factor of 

1.0000. We apply the wage index budget 

neutrality factor of 1.0000 in order to 

calculate the CY 2019 national per-visit 

rates. 

The LUPA per-visit rates are not 

calculated using case-mix weights. 

Therefore, no case-mix weights budget 

neutrality factor is needed to ensure 

budget neutrality for LUPA payments. 

Lastly, the per-visit rates for each 

discipline are updated by the CY 2019 

home health payment update percentage 

of 2.1 percent. The national per-visit 

rates are adjusted by the wage index 

based on the site of service of the 

beneficiary. The per-visit payments for 

LUPAs are separate from the LUPA addon payment amount, which is paid for 

episodes that occur as the only episode 

or initial episode in a sequence of 

adjacent episodes. The CY 2019 national 

per-visit rates for HHAs that submit the 

required quality data are updated by the 

CY 2019 HH payment update percentage 

of 2.1 percent and are shown in Table 

20. 

TABLE 20—CY 2019 NATIONAL PER-VISIT PAYMENT AMOUNTS FOR HHAS THAT DO SUBMIT THE REQUIRED QUALITY

DATA

HH Discipline 

CY 2018 

per-visit 

payment 

Wage index 

budget 

neutrality 

factor 

CY 2019 

HH payment 

update 

CY 2019 

per-visit 

payment 

Home Health Aide ............................................................................................ $64.94 × 1.0000 × 1.021 $66.30 

Medical Social Services ................................................................................... 229.86 × 1.0000 × 1.021 234.69 

Occupational Therapy ...................................................................................... 157.83 × 1.0000 × 1.021 161.14 

Physical Therapy .............................................................................................. 156.76 × 1.0000 × 1.021 160.05 

Skilled Nursing ................................................................................................. 143.40 × 1.0000 × 1.021 146.41 

Speech-Language Pathology ........................................................................... 170.38 × 1.0000 × 1.021 173.96 

The CY 2019 per-visit payment rates 

for HHAs that do not submit the 

required quality data are updated by the 

CY 2019 HH payment update percentage 

of 2.1 percent minus 2 percentage points 

and are shown in Table 21. 

TABLE 21—CY 2019 NATIONAL PER-VISIT PAYMENT AMOUNTS FOR HHAS THAT DO NOT SUBMIT THE REQUIRED

QUALITY DATA

HH Discipline CY 2018 

per-visit rates 

Wage index 

budget 

neutrality 

factor 

CY 2019 

HH payment 

update minus 

2 percentage 

points 

CY 2019 

per-visit rates 

Home Health Aide ............................................................................................ $64.94 × 1.0000 × 1.001 $65.00 

Medical Social Services ................................................................................... 229.86 × 1.0000 × 1.001 230.09 

Occupational Therapy ...................................................................................... 157.83 × 1.0000 × 1.001 157.99 

Physical Therapy .............................................................................................. 156.76 × 1.0000 × 1.001 156.92 

Skilled Nursing ................................................................................................. 143.40 × 1.0000 × 1.001 143.54 

Speech-Language Pathology ........................................................................... 170.38 × 1.0000 × 1.001 170.55 


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d. Low-Utilization Payment Adjustment 

(LUPA) Add-On Factors 

LUPA episodes that occur as the only 

episode or as an initial episode in a 

sequence of adjacent episodes are 

adjusted by applying an additional 

amount to the LUPA payment before 

adjusting for area wage differences. In 

the CY 2014 HH PPS final rule (78 FR 

72305), we changed the methodology for 

calculating the LUPA add-on amount by 

finalizing the use of three LUPA add-on 

factors: 1.8451 for SN; 1.6700 for PT; 

and 1.6266 for SLP. We multiply the 

per-visit payment amount for the first 

SN, PT, or SLP visit in LUPA episodes 

that occur as the only episode or an 

initial episode in a sequence of adjacent 

episodes by the appropriate factor to 

determine the LUPA add-on payment 

amount. For example, in the case of 

HHAs that do submit the required 

quality data, for LUPA episodes that 

occur as the only episode or an initial 

episode in a sequence of adjacent 

episodes, if the first skilled visit is SN, 

the payment for that visit will be 

$270.14 (1.8451 multiplied by $146.41), 

subject to area wage adjustment. 

e. CY 2019 Non-Routine Medical 

Supply (NRS) Payment Rates 

All medical supplies (routine and 

nonroutine) must be provided by the 

HHA while the patient is under a home 

health plan of care. Examples of 

supplies that can be considered nonroutine include dressings for wound 

care, I.V. supplies, ostomy supplies, 

catheters, and catheter supplies. 

Payments for NRS are computed by 

multiplying the relative weight for a 

particular severity level by the NRS 

conversion factor. To determine the CY 

2019 NRS conversion factor, we 

updated the CY 2018 NRS conversion 

factor ($53.03) by the CY 2019 home 

health payment update percentage of 2.1 

percent. We did not apply a 

standardization factor as the NRS 

payment amount calculated from the 

conversion factor is not wage or casemix adjusted when the final claim 

payment amount is computed. The 

proposed NRS conversion factor for CY 

2019 is shown in Table 22. 

TABLE 22—CY 2019 NRS CONVERSION FACTOR FOR HHAS THAT DO SUBMIT THE REQUIRED QUALITY DATA

CY 2018 NRS conversion factor 

CY 2019 

HH payment 

update 

CY 2019 

NRS 

conversion 

factor 

$53.03 ...................................................................................................................................................................... × 1.021 $54.14 

Using the CY 2019 NRS conversion 

factor, the payment amounts for the six 

severity levels are shown in Table 23. 

TABLE 23—CY 2019 NRS PAYMENT AMOUNTS FOR HHAS THAT DO SUBMIT THE REQUIRED QUALITY DATA

Severity level Points 

(scoring) 

Relative 

weight 

CY 2019 

NRS payment 

amounts 

1 ................................................................................................................................................... 0 0.2698 $ 14.61 

2 ................................................................................................................................................... 1 to 14 0.9742 52.74 

3 ................................................................................................................................................... 15 to 27 2.6712 144.62 

4 ................................................................................................................................................... 28 to 48 3.9686 214.86 

5 ................................................................................................................................................... 49 to 98 6.1198 331.33 

6 ................................................................................................................................................... 99+ 10.5254 569.85 

For HHAs that do not submit the 

required quality data, we updated the 

CY 2018 NRS conversion factor ($53.03) 

by the CY 2019 home health payment 

update percentage of 2.1 percent minus 

2 percentage points. The proposed CY 

2019 NRS conversion factor for HHAs 

that do not submit quality data is shown 

in Table 24. 

TABLE 24—CY 2019 NRS CONVERSION FACTOR FOR HHAS THAT DO NOT SUBMIT THE REQUIRED QUALITY DATA

CY 2018 NRS conversion factor 

CY 2019 

HH payment 

update 

percentage 

minus 

2 percentage 

points 

CY 2019 

NRS 

conversion 

factor 

$53.03 ...................................................................................................................................................................... × 1.001 $53.08 

The payment amounts for the various 

severity levels based on the updated 

conversion factor for HHAs that do not submit quality data are calculated in 

Table 25. 


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13 ‘‘Revised Delineations of Metropolitan 

Statistical Areas, Micropolitan Statistical Areas, and 

Combined Statistical Areas, and Guidance on Uses 

of the Delineations of These Areas’’. OMB 

BULLETIN NO. 18–03. April 10, 2018. https://

www.whitehouse.gov/wp-content/uploads/2018/04/ 

OMB-BULLETIN-NO.-18-03-Final.pdf. 

TABLE 25—CY 2019 NRS PAYMENT AMOUNTS FOR HHAS THAT DO NOT SUBMIT THE REQUIRED QUALITY DATA

Severity level Points 

(scoring) 

Relative 

weight 

CY 2019 

NRS payment 

amounts 

1 ................................................................................................................................................... 0 0.2698 $ 14.32 

2 ................................................................................................................................................... 1 to 14 0.9742 51.71 

3 ................................................................................................................................................... 15 to 27 2.6712 141.79 

4 ................................................................................................................................................... 28 to 48 3.9686 210.65 

5 ................................................................................................................................................... 49 to 98 6.1198 324.84 

6 ................................................................................................................................................... 99+ 10.5254 558.69 

D. Proposed Rural Add-On Payments for 

CYs 2019 Through 2022 

1. Background 

Section 421(a) of the MMA required, 

for HH services furnished in a rural 

areas (as defined in section 

1886(d)(2)(D) of the Act), for episodes or 

visits ending on or after April 1, 2004, 

and before April 1, 2005, that the 

Secretary increase the payment amount 

that otherwise would have been made 

under section 1895 of the Act for the 

services by 5 percent. 

Section 5201 of the DRA amended 

section 421(a) of the MMA. The 

amended section 421(a) of the MMA 

required, for HH services furnished in a 

rural area (as defined in section 

1886(d)(2)(D) of the Act), on or after 

January 1, 2006, and before January 1, 

2007, that the Secretary increase the 

payment amount otherwise made under 

section 1895 of the Act for those 

services by 5 percent. 

Section 3131(c) of the Affordable Care 

Act amended section 421(a) of the MMA 

to provide an increase of 3 percent of 

the payment amount otherwise made 

under section 1895 of the Act for HH 

services furnished in a rural area (as 

defined in section 1886(d)(2)(D) of the 

Act), for episodes and visits ending on 

or after April 1, 2010, and before 

January 1, 2016. 

Section 210 of the MACRA amended 

section 421(a) of the MMA to extend the 

rural add-on by providing an increase of 

3 percent of the payment amount 

otherwise made under section 1895 of 

the Act for HH services provided in a 

rural area (as defined in section 

1886(d)(2)(D) of the Act), for episodes 

and visits ending before January 1, 2018. 

Section 50208(a) of the Bipartisan 

Budget Act of 2018 amended section 

421(a) of the MMA to extend the rural 

add-on by providing an increase of 3 

percent of the payment amount 

otherwise made under section 1895 of 

the Act for HH services provided in a 

rural area (as defined in section 

1886(d)(2)(D) of the Act), for episodes 

and visits ending before January 1, 2019. 

This extension of the rural add-on 

payments was implemented as 

described in CMS Transmittal 2047 

published on March 20, 2018. 

2. Proposed Rural Add-On Payments for 

CYs 2019 Through 2022 

Section 50208(a)(1)(D) of the BBA of 

2018 adds a new subsection (b) to 

section 421 of the MMA to provide rural 

add-on payments for episodes and visits 

ending during CYs 2019 through 2022 . 

It also mandates implementation of a 

new methodology for applying those 

payments. Unlike previous rural addons, which were applied to all rural 

areas uniformly, the extension provides 

varying add-on amounts depending on 

the rural county (or equivalent area) 

classification by classifying each rural 

county (or equivalent area) into one of 

three distinct categories. 

Specifically, section 421(b)(1) of the 

MMA, as amended by section 50208 of 

the BBA of 2018, provides that rural 

counties (or equivalent areas) would be 

placed into one of three categories for 

purposes of HH rural add-on payments: 

(1) Rural counties and equivalent areas 

in the highest quartile of all counties 

and equivalent areas based on the 

number of Medicare home health 

episodes furnished per 100 individuals 

who are entitled to, or enrolled for, 

benefits under part A of Medicare or 

enrolled for benefits under part B of 

Medicare only, but not enrolled in a 

Medicare Advantage plan under part C 

of Medicare, as provided in section 

421(b)(1)(A) of the MMA (the ‘‘High 

utilization’’ category); (2) rural counties 

and equivalent areas with a population 

density of 6 individuals or fewer per 

square mile of land area and are not 

included in the category provided in 

section 421(b)(1)(A) of the MMA, as 

provided in section 421(b)(1)(B) of the 

MMA (the Low population density’’ 

category); and (3) rural counties and 

equivalent areas not in the categories 

provided in either sections 421(b)(1)(A) 

or 421(b)(1)(B) of the MMA, as provided 

in section 421(b)(1)(C) of the MMA (the 

‘‘All other’’ category). The list of 

counties and equivalent areas used in 

our analysis is based on the CY 2015 HH 

PPS wage index file, which includes the 

names of the constituent counties for 

each rural and urban area designation. 

We used the 2015 HH PPS wage index 

file as the basis for our analysis because 

the 2015 HH PPS wage index file 

already included SSA state and county 

codes not normally included on the HH 

PPS wage index files, but were included 

in the 2015 HH PPS wage index file due 

to the transition to new OMB geographic 

area delineations that year. The CY 2015 

HH PPS wage index file is available for 

download at: https://www.cms.gov/ 

Medicare/Medicare-Fee-for-ServicePayment/HomeHealthPPS/HomeHealth-Prospective-Payment-SystemRegulations-and-Notices-Items/CMS1611-F.html. This file includes 3,246 

counties and equivalent areas and their 

urban and rural status and uses the 

OMB’s geographic area delineations, as 

described in section III.C.3 of this 

proposed rule. We updated the 

information contained in this file to 

include any revisions to the geographic 

area delineations as published by the 

OMB in their publicly available 

bulletins that would reflect a change in 

urban and rural status. The states, the 

District of Columbia, and the U.S. 

territories of Guam, Puerto Rico, and the 

U.S. Virgin Islands are included in the 

analysis file containing 3,246 counties 

and equivalent areas. Of the 3,246 total 

counties and equivalent areas that were 

used in our analysis, 2,006 of these are 

considered rural for purposes of 

determining HH rural add-on payments. 

We identify equivalent areas based on 

the definition of equivalent entities as 

defined by the OMB in their most recent 

bulletin (No. 18–03) available at https:// 

www.whitehouse.gov/wp-content/ 

uploads/2018/04/OMB-BULLETIN-NO.- 

18-03-Final.pdf.13 We consider 

boroughs and a municipality in Alaska, 

parishes in Louisiana, municipios in 

Puerto Rico, and independent cities in 


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14 ‘‘Population, Housing Units, Area, and Density: 

2010—United States—County by State; and for 

Puerto Rico 2010 Census Summary File 1’’. https:// 

factfinder.census.gov/bkmk/table/1.0/en/DEC/10_

SF1/GCTPH1.US05PR. 

15 ‘‘Population, Housing Units, Land Area, and 

Density for U.S. Island Areas: 2010 (CPH–T–8)’’. 10/ 

28/2013. https://www.census.gov/data/tables/timeseries/dec/cph-series/cph-t/cph-t-8.html. 

Maryland, Missouri, Nevada, and 

Virginia as equivalent areas. 

Under section 421(b)(1)(A) of the 

MMA, one category of rural counties 

and equivalent areas for purposes of the 

HH rural add-on payment is a category 

comprised of rural counties or 

equivalent areas that are in the highest 

quartile of all counties or equivalent 

areas based on the number of Medicare 

home health episodes furnished per 100 

Medicare beneficiaries. Section 

421(b)(2)(B)(i) of the MMA requires the 

use of data from 2015 to determine 

which counties or equivalent areas are 

in the highest quartile of home health 

utilization for the category described 

under section 421(b)(1)(A) of the MMA, 

that is, the ‘‘High utilization’’ category. 

Section 421(b)(2)(B)(ii) of the MMA 

requires that data from the territories are 

to be excluded in determining which 

counties or equivalent areas are in the 

highest quartile of home health 

utilization and requires that the 

territories be excluded from the category 

described by section 421(b)(1)(A) of the 

MMA. Under section 421(b)(2)(B)(iii) of 

the MMA, the Secretary may exclude 

data from counties or equivalent areas 

in rural areas with a low volume of 

home health episodes in determining 

which counties or equivalent areas are 

in the highest quartile of home health 

utilization. If data is excluded for a 

county or equivalent area, section 

421(b)(2)(B)(iii) of the MMA requires 

that the county or equivalent area be 

excluded from the category described by 

section 421(b)(1)(A) of the MMA (the 

‘‘High utilization’’ category). 

We used CY 2015 claims data and 

2015 data from the Medicare Beneficiary 

Summary File to classify rural counties 

and equivalent areas into the ‘‘High 

utilization’’ category. We propose to 

classify a rural county or equivalent area 

into this category if the county or 

equivalent area is in the highest quartile 

(top 25th percentile) of all (urban and 

rural) counties and equivalent areas 

based on the ratio of Medicare home 

health episodes furnished per 100 

Medicare enrollees. The Medicare 

Beneficiary Summary File contained 

information on the Social Security 

Administration (SSA) state and county 

code of the beneficiary’s mailing 

address and information on enrollment 

in Medicare Part A, B, and C during 

2015. The claims data and information 

from the Medicare Beneficiary Summary 

File were pulled from the Chronic 

Condition Warehouse Virtual Research 

Data Center during December 2017. We 

used the claims data to determine how 

many home health episodes (excluding 

Requests for Anticipated Payments 

(RAPs) and zero payment episodes) 

occurred in each state and county or 

equivalent area. We assigned each home 

health episode to the state and county 

code of the beneficiary’s mailing 

address. As stipulated by section 

421(b)(2)(B)(ii) of the MMA, we 

excluded any data from the territories of 

Guam, Puerto Rico, and the U.S. Virgin 

Islands for determining which rural 

counties and equivalent areas belong in 

the ‘‘High utilization’’ category. We note 

that the territories of American Samoa 

and the Northern Mariana Islands were 

not included in the CY 2015 HH PPS 

wage index file to identify counties or 

equivalent areas for these territories so 

no data from these territories were 

included in determining the ‘‘High 

utilization’’ category. As we are not 

aware of any Medicare home health 

services being furnished in these two 

territories in recent years, we will 

address any application of home health 

rural add-on payments for these 

territories in the future should Medicare 

home health services be furnished in 

them. Therefore, counties and 

equivalent areas in the territories of 

American Samoa, Guam, the Northern 

Mariana Islands, Puerto Rico, and the 

U.S. Virgin Islands are not included in 

the ‘‘High utilization’’ category, as 

required by section 421(b)(2)(B)(ii) of 

the MMA. In addition, under the 

authority granted to the Secretary (by 

section 421(b)(2)(B)(iii) of the MMA) to 

exclude data from counties or 

equivalent areas in rural areas with a 

low volume of home health episodes, 

we excluded data from rural counties 

and equivalent areas that had 10 or 

fewer episodes during 2015 for 

determining which counties and 

equivalent areas belong in the ‘‘High 

utilization’’ category. We believe that 

using a threshold of 10 or fewer 

episodes is a reasonable threshold for 

defining low volume, in accordance 

with section 421(b)(2)(B)(iii) of the 

MMA. After excluding data from (1) the 

territories of Guam, Puerto Rico, and the 

U.S. Virgin Islands and (2) counties and 

equivalent areas that had 10 or fewer 

episodes during 2015, we determined 

the number of home health episodes 

furnished per 100 enrollees for the 

remaining counties and equivalent 

areas. We determined that the counties 

or equivalent areas in the highest 

quartile have a ratio of episodes to 

beneficiaries that is at or above 

17.72487. The highest quartile consisted 

of 778 counties or equivalent areas. Of 

those 778 counties or equivalent areas, 

510 are rural and, therefore, we propose 

to classify these 510 rural counties or 

equivalent areas into the ‘‘High 

utilization’’ category. 

Under section 421(b)(1)(B) of the 

MMA, another category of rural counties 

and equivalent areas for purposes of the 

HH rural add-on payment is a category 

comprised of rural counties or 

equivalent areas with a population 

density of 6 individuals or fewer per 

square mile of land area and that are not 

included in the ‘‘High utilization’’ 

category. Section 421(b)(2)(C) of the 

MMA requires that data from the 2010 

decennial Census be used for purposes 

of determining population density with 

respect to the category provided under 

section 421(b)(1)(B) of the MMA, that is, 

the ‘‘Low population density’’ category. 

We used 2010 Census data gathered 

from the tables provided at: https://

factfinder.census.gov/bkmk/table/1.0/ 

en/DEC/10_SF1/GCTPH1.US05PR and 

https://www.census.gov/data/tables/ 

time-series/dec/cph-series/cph-t/cph-t8.html to determine which counties and 

equivalent areas have a population 

density of six individuals or fewer per 

square mile of land area.14 15 In 

examining the rural counties and 

equivalent areas that were not already 

classified into the ‘‘High utilization’’ 

category, we identified each rural 

county or equivalent area that had a 

population density of six individuals or 

fewer per square mile of land area. As 

a result of that analysis, we determined 

there are 334 rural counties or 

equivalent areas that have a population 

density of six individuals or fewer per 

square mile of land area and that are not 

already classified into the ‘‘High 

utilization’’ category. We propose to 

classify 334 rural counties or equivalent 

areas into the ‘‘Low population density’’ 

category. 

Lastly, section 421(b)(1)(C) of the 

MMA provides for a category comprised 

of rural counties or equivalent areas that 

are not included in either the ‘‘High 

utilization’’ or the ‘‘Low population 

density’’ category. After determining 

which rural counties and equivalent 

areas should be classified into the ‘‘High 

utilization’’ and ‘‘Low population 

density’’ categories, we have determined 

that there are 1,162 remaining rural 

counties and equivalent areas that do 

not meet the criteria for inclusion in the 

‘‘High utilization’’ or ‘‘Low population 

density’’ categories. We propose to 

classify these 1,162 rural counties and 


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equivalent areas into the ‘‘All other’’ 

category. 

Section 421(b)(1) of the MMA 

specifies varying rural add-on payment 

percentages and varying durations of 

rural add-on payments for home health 

services furnished in a rural county or 

equivalent area according to which 

category described in section 

421(b)(1)(A), 421(b)(1)(B), or 

421(b)(1)(C) of the MMA that the rural 

county or equivalent area is classified 

into. The rural add-on payment 

percentages and duration of rural addon payments are shown in Table 26. The 

national standardized 60-day episode 

payment rate, the national per-visit 

rates, and the NRS conversion factor 

will be increased by the rural add-on 

payment percentages as noted in Table 

26 when services are provided in rural 

areas. The HH Pricer module, located 

within CMS’ claims processing system, 

will increase the base payment rates 

provided in Tables 18 through 25 by the 

appropriate rural add-on percentage 

prior to applying any case-mix and wage 

index adjustments. 

TABLE 26—HH PPS RURAL ADD-ON PERCENTAGES, CYS 2019–2022 

Category CY 2019 

(%) 

CY 2020 

(%) 

CY 2021 

(%) 

CY 2022 

(%) 

High utilization ................................................................................................. 1.5 0.5 ........................ ........................

Low population density .................................................................................... 4.0 3.0 2.0 1.0 

All other ............................................................................................................ 3.0 2.0 1.0 ........................

Section 421(b)(2)(A) of the MMA 

provides that the Secretary shall make a 

determination only for a single time as 

to which category under sections 

421(b)(1)(A), 421(b)(1)(B), or 

421(b)(1)(C) of the MMA that a rural 

county or equivalent area is classified 

into, and that the determination applies 

for the entire duration of the period for 

which rural add-on payments are in 

place under section 421(b) of the MMA. 

We propose that our proposed 

classifications of rural counties and 

equivalent areas in the ‘‘High 

utilization’’, ‘‘Low population density’’, 

and ‘‘All other’’ categories would be 

applicable throughout the period of 

rural add-on payments established 

under section 421(b) of the MMA and 

there would be no changes in 

classifications. This would mean that a 

rural county or equivalent area 

classified into the ‘‘High utilization’’ 

category would remain in that category 

through CY 2022 even after rural addon payments for that category ends after 

CY 2020. Similarly, a rural county or 

equivalent area classified into the ‘‘All 

other’’ category would remain in that 

category through CY 2022 even after 

rural add-on payments for that category 

ends after CY 2021. A rural county or 

equivalent area classified into the ‘‘Low 

population density’’ category would 

remain in that category through CY 

2022. 

Section 421(b)(3) of the MMA 

provides that there shall be no 

administrative or judicial review of the 

classification determinations made for 

the rural add-on payments under 

section 421(b)(1) of the MMA. 

Section 50208(a)(2) of the Bipartisan 

Budget Act of 2018 amended section 

1895(c) of the Act by adding a new 

requirement set out at section 1895(c)(3) 

of the Act. This requirement states that 

no claim for home health services may 

be paid unless ‘‘in the case of home 

health services furnished on or after 

January 1, 2019, the claim contains the 

code for the county (or equivalent area) 

in which the home health service was 

furnished.’’ This information will be 

necessary in order to calculate the rural 

add-on payments. We are proposing that 

HHAs enter the FIPS state and county 

code, rather than the SSA state and 

county code, on the claim. Many HHAs 

are more familiar with using FIPS state 

and county codes since HHAs in a 

number of States are already using FIPS 

state and county codes for Statemandated reporting programs. Our 

analysis is based entirely on the SSA 

state and county codes as these are the 

codes that are included in the Medicare 

Beneficiary Summary File. We crosswalked the SSA state and county codes 

used in our analysis to the FIPS state 

and county codes in order to provide 

HHAs with the corresponding FIPS state 

and county codes that should be 

reported on their claims. 

The data used to categorize each 

county or equivalent area is available in 

the Downloads section associated with 

the publication of this proposed rule at 

https://www.cms.gov/Medicare/ 

Medicare-Fee-for-Service-Payment/ 

HomeHealthPPS/Home-HealthProspective-Payment-SystemRegulations-and-Notices-Items/CMS1689-P.html. In addition, an Excel file 

containing the rural county or 

equivalent area names, their FIPS state 

and county codes, and their designation 

into one of the three rural add-on 

categories is available for download. 

We are soliciting comments regarding 

our application of the methodology 

specified by section 50208 of the 

Bipartisan Budget Act of 2018. 

E. Proposed Payments for High-Cost 

Outliers Under the HH PPS 

1. Background 

Section 1895(b)(5) of the Act allows 

for the provision of an addition or 

adjustment to the home health payment 

amount otherwise made in the case of 

outliers because of unusual variations in 

the type or amount of medically 

necessary care. Under the HH PPS, 

outlier payments are made for episodes 

whose estimated costs exceed a 

threshold amount for each Home Health 

Resource Group (HHRG). The episode’s 

estimated cost was established as the 

sum of the national wage-adjusted pervisit payment amounts delivered during 

the episode. The outlier threshold for 

each case-mix group or Partial Episode 

Payment (PEP) adjustment is defined as 

the 60-day episode payment or PEP 

adjustment for that group plus a fixeddollar loss (FDL) amount. For the 

purposes of the HH PPS, the FDL 

amount is calculated by multiplying the 

HH FDL ratio by a case’s wage-adjusted 

national, standardized 60-day episode 

payment rate, which yields an FDL 

dollar amount for the case. The outlier 

threshold amount is the sum of the wage 

and case-mix adjusted PPS episode 

amount and wage-adjusted FDL amount. 

The outlier payment is defined to be a 

proportion of the wage-adjusted 

estimated cost beyond the wageadjusted threshold. The proportion of 

additional costs over the outlier 

threshold amount paid as outlier 

payments is referred to as the losssharing ratio. 

As we noted in the CY 2011 HH PPS 

final rule (75 FR 70397 through 70399), 

section 3131(b)(1) of the Affordable Care 

Act amended section 1895(b)(3)(C) of 

the Act, and required the Secretary to 

reduce the HH PPS payment rates such 

that aggregate HH PPS payments were 


amozie on DSK3GDR082PROD with PROPOSALS2
32376 Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules 

reduced by 5 percent. In addition, 

section 3131(b)(2) of the Affordable Care 

Act amended section 1895(b)(5) of the 

Act by redesignating the existing 

language as section 1895(b)(5)(A) of the 

Act, and revising the language to state 

that the total amount of the additional 

payments or payment adjustments for 

outlier episodes could not exceed 2.5 

percent of the estimated total HH PPS 

payments for that year. Section 

3131(b)(2)(C) of the Affordable Care Act 

also added section 1895(b)(5)(B) of the 

Act which capped outlier payments as 

a percent of total payments for each 

HHA at 10 percent. 

As such, beginning in CY 2011, we 

reduce payment rates by 5 percent and 

target up to 2.5 percent of total 

estimated HH PPS payments to be paid 

as outliers. To do so, we first returned 

the 2.5 percent held for the target CY 

2010 outlier pool to the national, 

standardized 60-day episode rates, the 

national per visit rates, the LUPA addon payment amount, and the NRS 

conversion factor for CY 2010. We then 

reduced the rates by 5 percent as 

required by section 1895(b)(3)(C) of the 

Act, as amended by section 3131(b)(1) of 

the Affordable Care Act. For CY 2011 

and subsequent calendar years we target 

up to 2.5 percent of estimated total 

payments to be paid as outlier 

payments, and apply a 10 percent 

agency-level outlier cap. 

In the CY 2017 HH PPS proposed and 

final rules (81 FR 43737 through 43742 

and 81 FR 76702), we described our 

concerns regarding patterns observed in 

home health outlier episodes. 

Specifically, we noted that the 

methodology for calculating home 

health outlier payments may have 

created a financial incentive for 

providers to increase the number of 

visits during an episode of care in order 

to surpass the outlier threshold; and 

simultaneously created a disincentive 

for providers to treat medically complex 

beneficiaries who require fewer but 

longer visits. Given these concerns, in 

the CY 2017 HH PPS final rule (81 FR 

76702), we finalized changes to the 

methodology used to calculate outlier 

payments, using a cost-per-unit 

approach rather than a cost-per-visit 

approach. This change in methodology 

allows for more accurate payment for 

outlier episodes, accounting for both the 

number of visits during an episode of 

care and also the length of the visits 

provided. Using this approach, we now 

convert the national per-visit rates into 

per 15-minute unit rates. These per 15- 

minute unit rates are used to calculate 

the estimated cost of an episode to 

determine whether the claim will 

receive an outlier payment and the 

amount of payment for an episode of 

care. In conjunction with our finalized 

policy to change to a cost-per-unit 

approach to estimate episode costs and 

determine whether an outlier episode 

should receive outlier payments, in the 

CY 2017 HH PPS final rule we also 

finalized the implementation of a cap on 

the amount of time per day that would 

be counted toward the estimation of an 

episode’s costs for outlier calculation 

purposes (81 FR 76725). Specifically, 

we limit the amount of time per day 

(summed across the six disciplines of 

care) to 8 hours (32 units) per day when 

estimating the cost of an episode for 

outlier calculation purposes. 

We plan to publish the cost-per-unit 

amounts for CY 2019 in the rate update 

change request, which is issued after the 

publication of the CY 2019 HH PPS final 

rule. We note that in the CY 2017 HH 

PPS final rule (81 FR 76724), we stated 

that we did not plan to re-estimate the 

average minutes per visit by discipline 

every year. Additionally, we noted that 

the per-unit rates used to estimate an 

episode’s cost will be updated by the 

home health update percentage each 

year, meaning we would start with the 

national per-visit amounts for the same 

calendar year when calculating the costper-unit used to determine the cost of an 

episode of care (81 FR 76727). We note 

that we will continue to monitor the 

visit length by discipline as more recent 

data become available, and we may 

propose to update the rates as needed in 

the future. 

2. Proposed Fixed Dollar Loss (FDL) 

Ratio 

For a given level of outlier payments, 

there is a trade-off between the values 

selected for the FDL ratio and the losssharing ratio. A high FDL ratio reduces 

the number of episodes that can receive 

outlier payments, but makes it possible 

to select a higher loss-sharing ratio, and 

therefore, increase outlier payments for 

qualifying outlier episodes. 

Alternatively, a lower FDL ratio means 

that more episodes can qualify for 

outlier payments, but outlier payments 

per episode must then be lower. 

The FDL ratio and the loss-sharing 

ratio must be selected so that the 

estimated total outlier payments do not 

exceed the 2.5 percent aggregate level 

(as required by section 1895(b)(5)(A) of 

the Act). Historically, we have used a 

value of 0.80 for the loss-sharing ratio 

which, we believe, preserves incentives 

for agencies to attempt to provide care 

efficiently for outlier cases. With a losssharing ratio of 0.80, Medicare pays 80 

percent of the additional estimated costs 

above the outlier threshold amount. 

Simulations based on CY 2015 claims 

data (as of June 30, 2016) completed for 

the CY 2017 HH PPS final rule showed 

that outlier payments were estimated to 

represent approximately 2.84 percent of 

total HH PPS payments in CY 2017, and 

as such, we raised the FDL ratio from 

0.45 to 0.55. We stated that raising the 

FDL ratio to 0.55, while maintaining a 

loss-sharing ratio of 0.80, struck an 

effective balance of compensating for 

high-cost episodes while still meeting 

the statutory requirement to target up to, 

but no more than, 2.5 percent of total 

payments as outlier payments (81 FR 

76726). The national, standardized 60- 

day episode payment amount is 

multiplied by the FDL ratio. That 

amount is wage-adjusted to derive the 

wage-adjusted FDL amount, which is 

added to the case-mix and wageadjusted 60-day episode payment 

amount to determine the outlier 

threshold amount that costs have to 

exceed before Medicare would pay 80 

percent of the additional estimated 

costs. 

For this proposed rule, simulating 

payments using preliminary CY 2017 

claims data (as of March 2, 2018) and 

the CY 2018 HH PPS payment rates (82 

FR 51676), we estimate that outlier 

payments in CY 2018 would comprise 

2.30 percent of total payments. Based on 

simulations using CY 2017 claims data 

(as of March 2, 2018) and the proposed 

CY 2019 payment rates presented in 

section III.C.4 of this proposed rule, we 

estimate that outlier payments would 

constitute approximately 2.32 percent of 

total HH PPS payments in CY 2019. Our 

simulations show that the FDL ratio 

would need to be changed from 0.55 to 

0.51 to pay up to, but no more than, 2.5 

percent of total payments as outlier 

payments in CY 2019. 

Given the statutory requirement that 

total outlier payments not exceed 2.5 

percent of the total payments estimated 

to be made based under the HH PPS, we 

are proposing to lower the FDL ratio for 

CY 2019 from 0.55 to 0.51 to better 

approximate the 2.5 percent statutory 

maximum. However, we note that we 

are not proposing a change to the losssharing ratio (0.80) for the HH PPS to 

remain consistent with payment for 

high-cost outliers in other Medicare 

payment systems (for example, IRF PPS, 

IPPS, etc.). We note that in the final 

rule, we will update our estimate of 

outlier payments as a percent of total 

HH PPS payments using the most 

current and complete year of HH PPS 

data (CY 2017 claims data as of June 30, 

2018 or later) and therefore, we may 

adjust the final FDL ratio accordingly. 

We invite public comments on the 


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16https://www.npr.org/sections/health-shots/ 

2018/01/17/578423012/home-care-agencies-oftenwrongly-deny-medicare-help-to-the-chronically-ill. 

17http://www.alsa.org/als-care/resources/fyi/ 

medicare-and-home-health-care.html. 

18https://patientworthy.com/2018/01/31/ 

chronically-ill-are-being-denied-medicare-coverageby-home-care-agencies/. 

19https://alsnewstoday.com/2018/05/09/alsmedicare-cover-home-healthcare/. 

20Worms PM, The epidemiology of motor neuron 

diseases: A review of recent studies. J Neurol Sci. 

2001;191(1–2):3. 

21Mehta P, Prevalence of Amyotrophic Lateral 

Sclerosis—United States, 2012–2013. MMWR 

Surveill Summ. 2016;65(8):1. Epub 2016 Aug 5. 

22http://www.alsa.org. 

proposed change to the FDL ratio for CY 

2019. 

3. Home Health Outlier Payments: 

Clinical Example 

In recent months, concerns regarding 

the provision of home health care for 

Medicare patients with chronic, 

complex conditions have been raised by 

stakeholders as well as the 

press.16 17 18 19 News stories and 

anecdotal reports indicate that Medicare 

patients with chronic conditions may be 

encountering difficulty in accessing 

home health care if the goal of home 

health care is to maintain or prevent 

further decline of the patient’s condition 

rather than improvement of the patient’s 

condition. While patients must require 

skilled care to be eligible to receive 

services under the Medicare home 

health benefit, as outlined in regulation 

at 42 CFR 409.42(c), we note that 

coverage does not turn on the presence 

or absence of an individual’s potential 

for improvement, but rather on the 

beneficiary’s need for skilled care. 

Skilled care is covered where such 

services are necessary to maintain the 

patient’s current condition or prevent or 

slow further deterioration so long as the 

beneficiary requires skilled care for the 

services to be safely and effectively 

provided. Additionally, there appears to 

be confusion among the HHA provider 

community regarding possible Medicare 

payment through the HH PPS, as it 

appears that some perceive that 

payment is somewhat fixed and not able 

to account for home health stays with 

higher costs. 

The news stories referenced an 

individual with amyotrophic lateral 

sclerosis (ALS), also known as Lou 

Gehrig’s disease, and the difficulties 

encountered in finding Medicare home 

health care. Below we describe a 

clinical example of how care for a 

patient with ALS could qualify for an 

additional outlier payment, which 

would serve to offset unusually high 

costs associated with providing home 

health to a patient with unusual 

variations in the amount of medically 

necessary care. This example, using 

payment policies in place for CY 2018, 

is provided for illustrative purposes 

only. We hope that in providing the 

example below, which illustrates how 

HHAs could be paid by Medicare for 

providing care to patients with higher 

resource use in their homes, and by 

reiterating that the patient’s condition 

does not need to improve for home 

health services to be covered by 

Medicare, that there will be a better 

understanding of Medicare coverage 

policies and how outlier payments 

promote access to home health services 

for such patients under the HH PPS. 

a. Clinical Scenario 

Amyotrophic Lateral Sclerosis (ALS) 

is a progressive neuromuscular 

degenerative disease. The incidence 

rates of ALS have been increasing over 

the last few decades, and the peak 

incidence rate occurs at age 75.20 The 

prevalence rate of ALS in the United 

States is 4.3 per 100,000 population.21

Half of all people affected with ALS live 

at least 3 or more years after diagnosis. 

Twenty percent live 5 years or more; up 

to 10 percent will live more than 10 

years.22 Because of the progressive 

nature of this disease, care needs change 

and generally intensify as different body 

systems are affected. As such, patients 

with ALS often require a 

multidisciplinary approach to meet 

their care needs. 

The clinical care of a beneficiary with 

ALS typically includes the ongoing 

assessment of and treatment for many 

impacts to the body systems. As a part 

of a home health episode, a skilled 

nurse could assess the patient for 

shortness of breath, mucus secretions, 

sialorrhea, pressure sores, and pain. 

From these assessments, the nurse could 

speak with the doctor about changes to 

the care plan. A nurse’s aide could 

provide assistance with bathing, 

dressing, toileting, and transferring. 

Physical therapy services could also 

help the patient with range of motion 

exercises, adaptive transfer techniques, 

and assistive devices in order to 

maintain a level of function. 

The following is a description of how 

the provision of services per the home 

health plan of care could emerge for a 

beneficiary with ALS who qualifies for 

the Medicare home health benefit. We 

note that this example is provided for 

illustrative purposes only and does not 

constitute a specific Medicare payment 

scenario. 

b. Example One: Home Health Episodes 

1 and 2 

A beneficiary with ALS may be 

assessed by a physician in the 

community and subsequently be 

deemed to require home health services 

for skilled nursing, physical therapy, 

occupational therapy, and a home 

health aide. The beneficiary could 

receive skilled nursing twice a week for 

45 minutes to assess dyspnea when 

transferring to a bedside commode, 

stage two pressure ulcer at the sacrum, 

and pain status. In addition, a home 

health aide could provide services for 

three hours in the morning and three 

hours in the afternoon on Monday, 

Wednesday, and Friday and two and a 

half hours in the morning and 2.5 hours 

in the afternoon on Tuesday and 

Thursdays to assist with bathing, 

dressing, and transferring. Physical 

therapy services twice a week for 45 

minutes could be provided for adaptive 

transfer techniques, and occupational 

therapy services could be supplied 

twice a week for 45 minutes for 

assessment and teaching of assistive 

devices for activities of daily living to 

prevent or slow deterioration of the 

patient’s condition. Given the patient’s 

clinical presentation, for the purpose of 

this specific example, we will assign the 

patient payment group 40331 (C3F3S1 

with 20+ therapy visits). 

For the purposes of this example, we 

assume that services are rendered per 

week for a total of 8 weeks per home 

health episode. For both the first and 

second home health episodes of care, 

the calculation to determine outlier 

payment utilizing payment amounts and 

case mix weights for CY 2018, as 

described in the CY 2018 HH PPS final 

rule (82 FR 51676), would be as follows, 

per 60-day episode: 

TABLE 27—CLINICAL SCENARIO CALCULATION TABLE: EPISODES 1 AND 2 

HH outlier—CY 2018 illustrative values Value Operation Adjuster Equals Output 

National, Standardized 60-day Episode Payment Rate .................................... $3,039.64 .................. .................. .................. ..................


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TABLE 27—CLINICAL SCENARIO CALCULATION TABLE: EPISODES 1 AND 2—Continued 

HH outlier—CY 2018 illustrative values Value Operation Adjuster Equals Output 

Case-Mix Weight for Payment Group 4.0331 (for C3F3S1 for 20+ therapy ) .. 2.1359 .................. .................. .................. ..................

Case-Mix Adjusted Episode Payment Amount .................................................. 3,039.64 * 2.1359 = 6,492.37 

Labor Portion of the Case-Mix Adjusted Episode Payment Amount ................ 6,492.37 * 0.78535 ¥ 5,098.78 

Non-Labor Portion of the Case-Mix Adjusted Episode Payment Amount ........ 6,492.37 * 0.21465 = 1,393.59 

Wage Index Value (Beneficiary resides in 31084, Los Angeles-Long BeachGlendale, CA) ................................................................................................. 1.2781 .................. .................. .................. ..................

Wage-Adjusted Labor Portion of the Case-Mix Adjusted Episode Payment 

Amount ........................................................................................................... 5,098.78 * 1.2781 = 6,516.75 

NRS Payment Amount (Severity Level 2) ......................................................... 51.66 .................. .................. = 51.66 

Total Case-Mix and Wage-Adjusted Episode Payment Amount (WageAdjusted Labor Portion plus Non-Labor Portion of the Case-Mix Adjusted Episode Payment Amount plus the NRS Amount) ...................... .................. .................. .................. = 7,962.00 

Total Wage-Adjusted Fixed Dollar Loss Amount: 

Fixed Dollar Loss Amount (National, Standardized 60-day Episode Payment Rate * FDL Ratio) .......................................................................... 3,039.64 * 0.55 = 1,671.80 

Labor Portion of the Fixed Dollar Loss Amount ......................................... 1,671.80 * 0.78535 = 1,312.95 

Non-Labor Amount of the Fixed Dollar Loss Amount ................................ 1,671.80 * 0.21465 = 358.85 

Wage-Adjusted Fixed Dollar Loss Amount ................................................ 1,312.95 * 1.2781 = 1,678.08 

Total Wage-Adjusted Fixed Dollar Loss Amount (Wage-Adjusted 

Labor Portion plus Non-Labor Portion of the Case-Mix Adjusted 

Fixed Dollar Loss Amount) .............................................................. 1,678.08 + 358.85 = 2,036.93 

Total Wage-Adjusted Imputed Cost Amount: 

National Per-Unit Payment Amount—Skilled Nursing ................................ 48.01 .................. .................. .................. ..................

Number of 15-minute units (45 minutes = 3 units twice per week for 8 

weeks) ..................................................................................................... 48 .................. .................. .................. ..................

Imputed Skilled Nursing Visit Costs (National Per-Unit Payment Amount 

* Number of Units) .................................................................................. 48.01 * 48 = 2,304.48 

National Per-Unit Payment Amount—Home Health Aide .......................... 15.46 .................. .................. .................. ..................

Number of 15-minute units (28 hours per week = 112 units per week for 

8 weeks) .................................................................................................. 896 .................. .................. .................. ..................

Imputed Home Health Aide Costs (National Per-Unit Payment Amount * 

Number of Units) ..................................................................................... 15.46 * 896 = 13,852.16 

National Per-Unit Payment Amount—Occupational Therapy (OT) ............ 50.26 .................. .................. .................. ..................

Number of 15-minute units (45 minutes = 3 units twice per week for 8 

weeks) ..................................................................................................... 48 .................. .................. .................. ..................

Imputed OT Visit Costs (National Per-Unit Payment Amount * Number of 

Units) ....................................................................................................... 50.26 * 48 = 2,412.48 

National Per-Unit Payment Amount—Physical Therapy (PT) .................... 50.46 .................. .................. .................. ..................

Number of 15-minute units (45 minutes = 3 units twice per week for 8 

weeks) ..................................................................................................... 48 .................. .................. .................. ..................

Imputed PT Visit Costs (National Per-Unit Payment Amount * Number of 

Units) ....................................................................................................... 50.46 * 48 = 2,422.08 

Total Imputed Cost Amount for all Disciplines .................................... .................. .................. .................. = 20,991.20 

Labor Portion of the Imputed Costs for All Disciplines .............................. 20,991.20 * 0.78535 = 16,485.44 

Non-Labor Portion of Imputed Cost Amount for All Disciplines ................. 20,991.20 * 0.21465 = 4,505.76 

CBSA Wage Index (Beneficiary resides in 31084, Los Angeles-Long 

Beach-Glendale, CA) .............................................................................. 1.2781 .................. .................. .................. ..................

Wage-Adjusted Labor Portion of the Imputed Cost Amount for All Disciplines .................................................................................................... 16,485.44 * 1.2781 = 21,070.04 

Total Wage-Adjusted Imputed Cost Amount (Wage-Adjusted Labor 

Portion of the Imputed Cost Amount plus Non-Labor Portion of 

the Imputed Cost Amount) ............................................................... 21,070.04 + 4,505.76 = 25,575.80 

Total Payment Per 60-Day Episode: 

Outlier Threshold Amount (Total Wage-Adjusted Fixed Dollar Loss 

Amount + Total Case-Mix and Wage-Adjusted Episode Payment 

Amount) ................................................................................................... 2,036.93 + 7,962.00 = 9,998.93 

Total Wage-Adjusted Imputed Cost Amount—Outlier Threshold Amount 

(Total Wage-Adjusted Fixed Dollar Loss Amount + Total Case-Mix and 

Wage-Adjusted Episode Payment Amount) ........................................... 25,575.80 ¥ 9,998.93 = 15,576.87 

Outlier Payment = Imputed Costs Greater Than the Outlier Threshold * 

Loss-Sharing Ratio (0.80) ....................................................................... 15,576.87 * 0.80 = 12,461.50 

Total Payment Per 60-Day Episode = Total Case-Mix and WageAdjusted Episode Payment Amount + Outlier Payment ................. 7,962.00 + 12,461.50 = 20,423.49 


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For Episodes 1 and 2 of this clinical 

scenario, the preceding calculation 

illustrates how HHAs are paid by 

Medicare for providing care to patients 

with higher resource use in their homes. 

c. Example Two: Home Health Episodes 

3 and 4 

ALS is a progressive disease such that 

the patient would most likely need care 

beyond a second 60-day HH episode. A 

beneficiary’s condition could become 

more complex, such that the patient 

could require a gastrostomy tube, which 

could be placed during a hospital stay. 

The patient could be discharged to 

home for enteral nutrition to maintain 

weight and continuing care for his/her 

stage two pressure ulcer. Given the 

complexity of the beneficiary’s 

condition in this example, the episode 

could remain at the highest level of care 

C3F3S1 and would now fit into 

equation 4. 

For the purposes of this example, we 

assume that services are rendered per 

week for a total of 8 weeks per home 

health episode. For both the third and 

fourth home health episodes of care, the 

calculation to determine outlier 

payment utilizing payment amounts and 

case mix weights for CY 2018 as 

described in as described in the CY 

2018 HH PPS final rule (82 FR 51676) 

would be as follows, per 60-day 

episode: 

TABLE 28—CLINICAL SCENARIO CALCULATION: EPISODES 3 AND 4 

HH outlier—CY 2018 illustrative values Value Operation Adjuster Equals Output 

National, Standardized 60-day Episode Payment Rate .................................... $3,039.64 .................. .................. .................. ..................

Case-Mix Weight for Payment Group 4.0331 (for C3F3S1 for 20+ therapy) ... 2.1359 .................. .................. .................. ..................

Case-Mix Adjusted Episode Payment Amount .................................................. 3,039.64 * 2.1359 = $6,492.37 

Labor Portion of the Case-Mix Adjusted Episode Payment Amount ................ 6,492.37 * 0.78535 = 5,098.78 

Non-Labor Portion of the Case-Mix Adjusted Episode Payment Amount ........ 6,492.37 * 0.21465 = 1,393.59 

Wage Index Value (Beneficiary resides in 31084, Los Angeles-Long BeachGlendale, CA) ................................................................................................. 1.2781 .................. .................. .................. ..................

Wage-Adjusted Labor Portion of the Case-Mix Adjusted Episode Payment 

Amount ........................................................................................................... 5,098.78 * 1.2781 = 6,516.75 

NRS Payment Amount (Severity Level 2) ......................................................... 324.53 .................. .................. = 324.53 

Total Case-Mix and Wage-Adjusted Episode Payment Amount (WageAdjusted Labor Portion plus Non-Labor Portion of the Case-Mix Adjusted Episode Payment Amount plus the NRS Amount) ...................... .................. .................. .................. = 8,234.87 

Total Wage-Adjusted Fixed Dollar Loss Amount: 

Fixed Dollar Loss Amount (National, Standardized 60-day Episode Payment Rate * FDL Ratio) .......................................................................... 3,039.64 * 0.55 = 1,671.80 

Labor Portion of the Fixed Dollar Loss Amount ......................................... 1,671.80 * 0.78535 = 1,312.95 

Non-Labor Amount of the Fixed Dollar Loss Amount ................................ 1,671.80 * 0.21465 = 358.85 

Wage-Adjusted Fixed Dollar Loss Amount ................................................ 1,312.95 * 1.2781 = 1,678.08 

Total Wage-Adjusted Fixed Dollar Loss Amount (Wage-Adjusted 

Labor Portion plus Non-Labor Portion of the Case-Mix Adjusted 

Fixed Dollar Loss Amount) .............................................................. 1,678.08 + 358.85 = 2,036.93 

Total Wage-Adjusted Imputed Cost Amount: 

National Per-Unit Payment Amount—Skilled Nursing ................................ 48.01 .................. .................. .................. ..................

Number of 15-minute units (45 minutes = 3 units twice per week for 8 

weeks) ..................................................................................................... 48 .................. .................. .................. ..................

Imputed Skilled Nursing Visit Costs (National Per-Unit Payment Amount 

* Number of Units) .................................................................................. 48.01 * 48 = 2,304.48 

National Per-Unit Payment Amount—Home Health Aide .......................... 15.46 .................. .................. .................. ..................

Number of 15-minute units (28 hours per week = 112 units per week for 

8 weeks) .................................................................................................. 896 .................. .................. .................. ..................

Imputed Home Health Aide Costs (National Per-Unit Payment Amount * 

Number of Units) ..................................................................................... 15.46 * 896 = 13,852.16 

National Per-Unit Payment Amount—Occupational Therapy (OT) ............ 50.26 .................. .................. .................. ..................

Number of 15-minute units (45 minutes = 3 units twice per week for 8 

weeks) ..................................................................................................... 48 .................. .................. .................. ..................

Imputed OT Visit Costs (National Per-Unit Payment Amount * Number of 

Units) ....................................................................................................... 50.26 * 48 = 2,412.48 

National Per-Unit Payment Amount—Physical Therapy (PT) .................... 50.46 .................. .................. .................. ..................

Number of 15-minute units (45 minutes = 3 units twice per week for 8 

weeks) ..................................................................................................... 48 .................. .................. .................. ..................

Imputed PT Visit Costs (National Per-Unit Payment Amount * Number of 

Units) ....................................................................................................... 50.46 * 48 = 2,422.08 

Total Imputed Cost Amount for all Disciplines .................................... .................. .................. .................. = 20,991.20 

Labor Portion of the Imputed Costs for All Disciplines .............................. 20,991.20 * 0.78535 = 16,485.44 

Non-Labor Portion of Imputed Cost Amount for All Disciplines ................. 20,991.20 * 0.21465 = 4,505.76 

CBSA Wage Index (Beneficiary resides in 31084, Los Angeles-Long 

Beach-Glendale, CA) .............................................................................. 1.2781 .................. .................. .................. ..................

Wage-Adjusted Labor Portion of the Imputed Cost Amount for All Disciplines .................................................................................................... 16,485.44 * 1.2781 = 21,070.04 

Total Wage-Adjusted Imputed Cost Amount (Wage-Adjusted Labor 

Portion of the Imputed Cost Amount plus Non-Labor Portion of 

the Imputed Cost Amount) ............................................................... 21,070.04 + 4,505.76 = 25,575.80 

Total Payment Per 60-Day Episode: 


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32380 Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules 

TABLE 28—CLINICAL SCENARIO CALCULATION: EPISODES 3 AND 4—Continued 

HH outlier—CY 2018 illustrative values Value Operation Adjuster Equals Output 

Outlier Threshold Amount (Total Wage-Adjusted Fixed Dollar Loss 

Amount + Total Case-Mix and Wage-Adjusted Episode Payment 

Amount) ................................................................................................... 2,036.93 + 8,234.87 = 10,271.80 

Total Wage-Adjusted Imputed Cost Amount¥Outlier Threshold Amount 

(Total Wage-Adjusted Fixed Dollar Loss Amount + Total Case-Mix and 

Wage-Adjusted Episode Payment Amount) ........................................... 25,575.80 ¥ 10,271.80 = 15,304.00 

Outlier Payment = Imputed Costs Greater Than the Outlier Threshold * 

Loss-Sharing Ratio (0.80) ....................................................................... 15,304.00 * 0.80 = 12,243.20 

Total Payment Per 60-Day Episode = Total Case-Mix and WageAdjusted Episode Payment Amount + Outlier Payment ................. 12,243.20 + 8,234.87 = 20,478.07 

For Episodes 3 and 4 of this clinical 

scenario, the above calculation 

demonstrates how outlier payments 

could be made for patients with chronic, 

complex conditions under the HH PPS. 

We reiterate that outlier payments could 

provide payment to HHAs for those 

patients with higher resource use and 

that the patient’s condition does not 

need to improve for home health 

services to be covered by Medicare. We 

appreciate the feedback we have 

received from the public on the outlier 

policy under the HH PPS and look 

forward to ongoing collaboration with 

stakeholders on any further refinements 

that may be warranted. We note that this 

example is presented for illustrative 

purposes only, and is not intended to 

suggest that all diagnoses of ALS should 

receive the grouping assignment or 

number of episodes described here. The 

CMS Grouper assigns these groups 

based on information in the OASIS. 

F. Implementation of the Patient-Driven 

Groupings Model (PDGM) for CY 2020 

1. Background and Legislation, 

Overview, Data, and File Construction 

a. Background and Legislation 

In the CY 2018 HH PPS proposed 

rule, we proposed an alternative case 

mix-adjustment methodology (known as 

the Home Health Groupings Model or 

HHGM), to be implemented for home 

health periods of care beginning on or 

after January 1, 2019. Ultimately this 

proposed alternative case-mix 

adjustment methodology, including a 

proposed change in the unit of payment 

from 60 days to 30 days, was not 

finalized in the CY 2018 HH PPS final 

rule in order to allow us additional time 

to consider public comments for 

potential refinements to the 

methodology (82 FR 51676). 

On February 9, 2018, the Bipartisan 

Budget Act of 2018 (BBA of 2018) (Pub. 

L. 115–123) was signed into law. 

Section 51001(a)(1) of the BBA of 2018 

amended section 1895(b)(2) of the Act 

by adding a new subparagraph (B) to 

require the Secretary to apply a 30-day 

unit of service for purposes of 

implementing the HH PPS, effective 

January 1, 2020. Section 51001(a)(2)(A) 

of the BBA of 2018 added a new 

subclause (iv) under section 

1895(b)(3)(A) of the Act, requiring the 

Secretary to calculate a standard 

prospective payment amount (or 

amounts) for 30-day units of service that 

end during the 12-month period 

beginning January 1, 2020 in a budget 

neutral manner such that estimated 

aggregate expenditures under the HH 

PPS during CY 2020 are equal to the 

estimated aggregate expenditures that 

otherwise would have been made under 

the HH PPS during CY 2020 in the 

absence of the change to a 30-day unit 

of service. Section 1895(b)(3)(A)(iv) of 

the Act requires that the calculation of 

the standard prospective payment 

amount (or amounts) for CY 2020 be 

made before, and not affect the 

application of, the provisions of section 

1895(b)(3)(B) of the Act. Section 

1895(b)(3)(A)(iv) of the Act additionally 

requires that in calculating the standard 

prospective payment amount (or 

amounts), the Secretary must make 

assumptions about behavioral changes 

that could occur as a result of the 

implementation of the 30-day unit of 

service under section 1895(b)(2)(B) of 

the Act and case-mix adjustment factors 

established under section 1895(b)(4)(B) 

of the Act. Section 1895(b)(3)(A)(iv) of 

the Act further requires the Secretary to 

provide a description of the behavioral 

assumptions made in notice and 

comment rulemaking. 

Section 51001(a)(2)(B) of the BBA of 

2018 also added a new subparagraph (D) 

to section 1895(b)(3) of the Act. Section 

1895(b)(3)(D)(i) of the Act requires the 

Secretary to annually determine the 

impact of differences between assumed 

behavior changes as described in section 

1895(b)(3)(A)(iv) of the Act, and actual 

behavior changes on estimated aggregate 

expenditures under the HH PPS with 

respect to years beginning with 2020 

and ending with 2026. Section 

1895(b)(3)(D)(ii) of the Act requires the 

Secretary, at a time and in a manner 

determined appropriate, through notice 

and comment rulemaking, provide for 

one or more permanent increases or 

decreases to the standard prospective 

payment amount (or amounts) for 

applicable years, on a prospective basis, 

to offset for such increases or decreases 

in estimated aggregate expenditures, as 

determined under section 

1895(b)(3)(D)(i) of the Act. Additionally, 

1895(b)(3)(D)(iii) of the Act requires the 

Secretary, at a time and in a manner 

determined appropriate, through notice 

and comment rulemaking, to provide for 

one or more temporary increases or 

decreases to the payment amount for a 

unit of home health services for 

applicable years, on a prospective basis, 

to offset for such increases or decreases 

in estimated aggregate expenditures, as 

determined under section 

1895(b)(3)(D)(i) of the Act. Such a 

temporary increase or decrease shall 

apply only with respect to the year for 

which such temporary increase or 

decrease is made, and the Secretary 

shall not take into account such a 

temporary increase or decrease in 

computing the payment amount for a 

unit of home health services for a 

subsequent year. 

Section 51001(a)(3) of the BBA of 

2018 amends section 1895(b)(4)(B) of 

the Act by adding a new clause (ii) to 

require the Secretary to eliminate the 

use of therapy thresholds in the casemix system for 2020 and subsequent 

years. Lastly, section 51001(b)(4) of the 

BBA of 2018 requires the Secretary to 

pursue notice and comment rulemaking 

no later than December 31, 2019 on a 

revised case-mix system for payment of 

home health services under the HH PPS 

b. Overview 

To meet the requirement under 

section 51001(b)(4) of the BBA of 2018 

to engage in notice and comment 

rulemaking on a HH PPS case-mix 

system and to better align payment with 


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patient care needs and better ensure that 

clinically complex and ill beneficiaries 

have adequate access to home health 

care, we are proposing case-mix 

methodology refinements through the 

implementation of the Patient-Driven 

Groupings Model (PDGM). The 

proposed PDGM shares many of the 

features included in the alternative case 

mix-adjustment methodology proposed 

in the CY 2018 HH PPS proposed rule. 

We propose to implement the PDGM for 

home health periods of care beginning 

on or after January 1, 2020. The 

implementation of the PDGM will 

require provider education and training, 

updating and revising relevant manuals, 

and changing claims processing 

systems. Implementation starting in CY 

2020 would provide opportunity for 

CMS, its contractors, and the agencies 

themselves to prepare. This patientcentered model groups periods of care 

in a manner consistent with how 

clinicians differentiate between patients 

and the primary reason for needing 

home health care. As required by 

section 1895(b)(2)(B) of the Act, we 

propose to use 30-day periods rather 

than the 60-day episode used in the 

current payment system. In addition, 

section 1895(b)(4)(B)(ii) of the Act 

eliminates the use of therapy thresholds 

in the case-mix adjustment for 

determining payment. The proposed 

PDGM does not use the number of 

therapy visits in determining payment. 

The change from the current case-mix 

adjustment methodology for the HH 

PPS, which relies heavily on therapy 

thresholds as a major determinant for 

payment and thus provides a higher 

payment for a higher volume of therapy 

provided, to the PDGM would remove 

the financial incentive to overprovide 

therapy in order to receive a higher 

payment. The PDGM would base casemix adjustment for home health 

payment solely on patient 

characteristics, a more patient-focused 

approach to payment. Finally, the 

PDGM relies more heavily on clinical 

characteristics and other patient 

information (for example, diagnosis, 

functional level, comorbid conditions, 

admission source) to place patients into 

clinically meaningful payment 

categories. In total, there are 216 

different payment groups in the PDGM. 

Costs during an episode/period of 

care are estimated based on the concept 

of resource use, which measures the 

costs associated with visits performed 

during a home health episode/period. 

For the current HH PPS case-mix 

weights, we use Wage Weighted 

Minutes of Care (WWMC), which uses 

data from the Bureau of Labor Statistics 

(BLS) reflecting the Home Health Care 

Service Industry. For the PDGM, we 

propose shifting to a Cost-Per-Minute 

plus Non-Routine Supplies (CPM + 

NRS) approach, which uses information 

from the Medicare Cost Report. The 

CPM + NRS approach incorporates a 

wider variety of costs (such as 

transportation) compared to the BLS 

estimates and the costs are available for 

individual HHA providers while the 

BLS costs are aggregated for the Home 

Health Care Service industry. 

Similar to the current payment 

system, 30-day periods under the PDGM 

would be classified as ‘‘early’’ or ‘‘late’’ 

depending on when they occur within 

a sequence of 30-day periods. Under the 

current HH PPS, the first two 60-day 

episodes of a sequence of adjacent 60- 

day episodes are considered early, while 

the third 60-day episode of that 

sequence and any subsequent episodes 

are considered late. Under the PDGM, 

the first 30-day period is classified as 

early. All subsequent 30-day periods in 

the sequence (second or later) are 

classified as late. We propose to adopt 

this timing classification for 30-day 

periods with the implementation of the 

PDGM for CY 2020. Similar to the 

current payment system, we propose 

that a 30-day period could not be 

considered early unless there was a gap 

of more than 60 days between the end 

of one period and the start of another. 

The comprehensive assessment would 

still be completed within 5 days of the 

start of care date and completed no less 

frequently than during the last 5 days of 

every 60 days beginning with the start 

of care date, as currently required by 

§ 484.55, Condition of participation: 

Comprehensive assessment of patients. 

In addition, the plan of care would still 

be reviewed and revised by the HHA 

and the physician responsible for the 

home health plan of care no less 

frequently than once every 60 days, 

beginning with the start of care date, as 

currently required by § 484.60(c), 

Condition of participation: Care 

planning, coordination of services, and 

quality of care. 

Under the PDGM, we propose that 

each period would be classified into one 

of two admission source categories 

—community or institutional— 

depending on what healthcare setting 

was utilized in the 14 days prior to 

home health. The 30-day period would 

be categorized as institutional if an 

acute or post-acute care stay occurred in 

the 14 days prior to the start of the 30- 

day period of care. The 30-day period 

would be categorized as community if 

there was no acute or post-acute care 

stay in the 14 days prior to the start of 

the 30-day period of care. 

The PDGM would group 30-day 

periods into categories based on a 

variety of patient characteristics. We 

propose grouping periods into one of six 

clinical groups based on the principal 

diagnosis. The principal diagnosis 

reported would provide information to 

describe the primary reason for which 

patients are receiving home health 

services under the Medicare home 

health benefit. The proposed six clinical 

groups, are as follows: 

• Musculoskeletal Rehabilitation. 

• Neuro/Stroke Rehabilitation. 

• Wounds—Post-Op Wound 

Aftercare and Skin/Non-Surgical 

Wound Care. 

• Complex Nursing Interventions. 

• Behavioral Health Care (including 

Substance Use Disorders). 

• Medication Management, Teaching 

and Assessment (MMTA). 

Under the PDGM, we propose that 

each 30-day period would be placed 

into one of three functional levels. The 

level would indicate if, on average, 

given its responses on certain functional 

OASIS items, a 30-day period is 

predicted to have higher costs or lower 

costs. We are proposing to assign 

roughly 33 percent of periods within 

each clinical group to each functional 

level. The criteria for assignment to each 

of the three functional levels may differ 

across each clinical group. The 

proposed functional level assignment 

under the PDGM is very similar to the 

functional level assignment in the 

current payment system. Finally, the 

PDGM includes a comorbidity 

adjustment category based on the 

presence of secondary diagnoses. We 

propose that, depending on a patient’s 

secondary diagnoses, a 30-day period 

may receive ‘‘no’’ comorbidity 

adjustment, a ‘‘low’’ comorbidity 

adjustment, or a ‘‘high’’ comorbidity 

adjustment. For low-utilization payment 

adjustments (LUPAs) under the PDGM, 

we propose that the LUPA threshold 

would vary for a 30-day period under 

the PDGM depending on the PDGM 

payment group to which it is assigned. 

For each payment group, we propose to 

use the 10th percentile value of visits to 

create a payment group specific LUPA 

threshold with a minimum threshold of 

at least 2 for each group. 

Figure BBB1 represents how each 30- 

day period of care would be placed into 

one of the 216 home health resource 

groups (HHRGs) under the proposed 

PDGM for CY 2020. 

BILLING CODE 4210–01–P 


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BILLING CODE 4210–01–C 

c. Data and File Construction 

To create the PDGM proposed model 

and related analyses, a data file based 

on home health episodes of care as 

reported in Medicare home health 

claims was utilized. The claims data 

provide episode-level data (for example, 

episode From and Through Dates, total 

number of visits, HHRG, diagnoses), as 

well as visit-level data (visit date, visit 

length in 15-minute units, discipline of 

the staff, etc.). The claims also provide 

data on whether NRS was provided 

during the episode and total charges for 

NRS. 

The core file for most of the analyses 

for this proposed rule includes 100 

percent of home health episode claims 

with Through Dates in Calendar Year 

(CY) 2017, processed by March 2, 2018, 

accessed via the Chronic Conditions 

Data Warehouse (CCW). Original or 

adjustment claims processed after 

March 2, 2018, would not be reflected 

in the core file. The claims-based file 

was supplemented with additional 

variables that were obtained from the 

CCW, such as information regarding 

other Part A and Part B utilization. 

The data were cleaned by processing 

any remaining adjustments and by 


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23Less than 0.1 percent of all visits were recorded 

as having greater than 8 hours of service. 

24Opportunity costs represent the foregone 

resources from providing each minute of care 

versus using the resources for another purpose (the 

next best alternative). Generally, opportunity costs 

represent more than the monetary costs, but in 

these analyses, they are proxied using hourly wage 

rates. 

25Labor mix represents the percentage of 

employees with a particular occupational title (as 

obtained from claims) within a home health 

discipline. Physical therapist aides and 

occupational therapist aides were not included in 

the labor mix. 

excluding duplicates and claims that 

were Requests for Anticipated Payment 

(RAP). In addition, visit-level variables 

needed for the analysis were extracted 

from the revenue center trailers (that is, 

the line items that describe the visits) 

and downloaded as a separate visit-level 

file, with selected episode-level 

variables merged onto the records for 

visits during those episodes. To account 

for potential data entry errors, the visitlevel variables for visit length were topcensored at 8 hours.23

A set of data cleaning exclusions were 

applied to the episode-level file, which 

resulted in the exclusion of the 

following: 

• Episodes that were RAPs. 

• Episodes with no covered visits. 

• Episodes with any missing units or 

visit data. 

• Episodes with zero payments. 

• Episodes with no charges. 

• Non-LUPA episodes missing an 

HHRG. 

The analysis file also includes data on 

patient characteristics obtained from the 

OASIS assessments conducted by home 

health agency (HHA) staff at the start of 

each episode. The assessment data are 

electronically submitted by HHAs to a 

central CMS repository. In constructing 

the core data file, 100 percent of the 

OASIS assessments submitted October 

2016 through December 2017 from the 

CMS repository were uploaded by CMS 

to the CCW. A CCW-derived linking key 

(Bene ID) was used to match the OASIS 

data with CY 2017 episodes of care. 

Episodes that could not be linked with 

an OASIS assessment were excluded 

from the analysis file, as they included 

insufficient patient-level data to create 

the PDGM. 

To construct measures of resource 

use, a variety of data sources were used 

(see section III.F.2 of this proposed rule 

for the proposed methodology used to 

calculate the cost of care under the 

PDGM). First, BLS data on average 

wages and fringe benefits were used to 

produce wage-weighted minutes of care 

(WWMC), the approach used in the 

current system to calculate the cost of 

care. The wage data are for North 

American Industry Classification 

System (NAICS) 621600—Home Health 

Care Services (see Table 29). 

TABLE 29—BLS STANDARD OCCUPATION CLASSIFICATION (SOC) CODES

FOR HOME HEALTH PROVIDERS

Standard 

Occupation 

Code (SOC) No. 

Occupation 

title 

29–1141 ................ Registered Nurses. 

29–2061 ................ Licensed Practical and Licensed Vocational Nurses. 

29–1123 ................ Physical Therapists. 

31–2021 ................ Physical Therapist Assistants. 

31–2022 ................ Physical Therapist Aides. 

29–1122 ................ Occupational Therapists. 

31–2011 ................ Occupational Therapist Assistants. 

31–2012 ................ Occupational Therapist Aides. 

TABLE 29—BLS STANDARD OCCUPATION CLASSIFICATION (SOC) CODES

FOR HOME HEALTH PROVIDERS— 

Continued 

Standard 

Occupation 

Code (SOC) No. 

Occupation 

title 

29–1127 ................ Speech-Language Pathologists. 

21–1022 ................ Medical and Public Health Social Workers. 

21–1023 ................ Mental Health and Substance 

Abuse Social Workers. 

31–1011 ................ Home Health Aides. 

The WWMC approach determines 

resource use for each episode by 

multiplying utilization (in terms of the 

number of minutes of direct patient care 

provided by each discipline) by the 

corresponding opportunity cost of that 

care (represented by wage and fringe 

benefit rates from the BLS).24 Table 30 

shows the occupational titles and 

corresponding mean hourly wage rates 

from the BLS. The employer cost per 

hour worked shown in the fifth column 

is calculated by adding together the 

mean hourly wage rates and the fringe 

benefit rates from the BLS. For home 

health disciplines that include multiple 

occupations (such as skilled nursing), 

the opportunity cost is generated by 

weighting the employer cost by the 

proportions of the labor mix.25

Otherwise, the opportunity cost is the 

same as the employer cost per hour. 

TABLE 30—OCCUPATIONAL EMPLOYMENT AND WAGES PROVIDED BY THE FEDERAL BUREAU OF LABOR STATISTICS

Occupation title 

National 

employment 

counts 

Mean 

hourly 

wage 

Estimate 

of benefits 

as 

a % of 

wages 

Estimated 

employer 

cost 

per hour 

worked 

Labor 

mix Home health discipline Opportunity cost 

Registered Nurses .............. 179,280 $33.34 43.85 $47.96 0.66 Skilled Nursing ................... $42.42 

Licensed Practical and Licensed Vocational Nurses.85,410 22.03 43.85 31.69 0.34 

Physical Therapists ............. 24,810 47.23 40.92 66.55 0.66 Physical Therapy ................ 58.55 

Physical Therapist Assistants.7,330 31.43 35.79 42.68 0.34 

Occupational Therapists ..... 10,760 45.27 40.92 63.79 0.79 Occupational Therapy ........ 59.97 

Occupational Therapist Assistants.2,270 33.83 35.79 45.94 0.21 

Speech-Language Pathologists.5,360 47.08 40.92 66.34 ............ Speech Therapy ................. 66.34 

Medical and Public Health 

Social Workers.

18,930 28.76 40.92 40.53 0.97 Medical Social Service ....... 40.42 

Mental Health and Substance Abuse Social 

Workers.

500 25.85 40.92 36.43 0.03 

Home Health Aides ............. 408,920 11.25 35.79 15.28 ............ Home Health Aide .............. 15.28 

Source: May 2016 National Industry-Specific Occupational Employment and Wage Estimates—NAICS 621600—Home Health Care Services. 


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26The case-mix group specific LUPA thresholds 

were determined using episodes that were 

considered LUPAs under the current payment 

system. 

Home Health Agency Medicare Cost 

Report (MCR) data for FY 2016 were 

also used to construct a measure of 

resource use after trimming out HHAs 

whose costs were outliers (see section 

III.F.2 of this proposed rule). These data 

are used to provide a representation of 

the average costs of visits provided by 

HHAs in the six Medicare home health 

disciplines: Skilled nursing; physical 

therapy; occupational therapy; speechlanguage pathology; medical social 

services; and home health aide services. 

Cost report data are publicly available 

at: https://www.cms.gov/ResearchStatistics-Data-and-Systems/ 

Downloadable-Public-Use-Files/CostReports/. More details regarding how 

HHA MCR data were used in 

constructing the CPM+NRS measure of 

resource use can be found in section 

III.F.2 of this proposed rule. 

A comment submitted in response to 

the CY 2018 HH PPS proposed rule 

questioned the trimming process for the 

Medicare cost report data used to 

calculate the cost-per-minute plus nonroutine supplies (CPM+NRS) 

methodology used to estimate resource 

use (outlined in section III.F.2 of this 

rule). The commenter stated that for 

rebasing, CMS audited 100 cost reports 

and the findings of such audits found 

that costs were overstated by 8 percent 

and that finding was attributed to the 

entire population of HHA Medicare cost 

reports. The commenter questioned if 

CMS applied the 8 percent ‘‘adjustment 

factor’’ in last year’s proposed rule, 

requested CMS provide the number of 

cost reports used for the proposed rule, 

asked if only cost reports of freestanding 

HHAs were used, and requested that 

CMS describe what percentage of cost 

reports did not list any costs for NRS, 

yet listed NRS charges. 

For the calculations in the CY 2018 

HH PPS proposed rule, CMS applied the 

trimming methodology described in 

detail in the ‘‘Analyses in Support of 

Rebasing & Updating Medicare Home 

Health Payment Rates’’ Report available 

at: https://www.cms.gov/Medicare/ 

Medicare-Fee-for-Service-Payment/ 

HomeHealthPPS/Downloads/Analysesin-Support-of-Rebasing-and-Updatingthe-Medicare-Home-Health-PaymentRates-Technical-Report.pdf. This is also 

the trimming methodology outlined in 

the CY 2014 HH PPS proposed rule (78 

FR 40284). Of note, for each discipline 

and for NRS, we also followed the 

methodology laid out in the ‘‘Rebasing 

Report’’ by trimming out values that fell 

in the top or bottom 1 percent of the 

distribution across all HHAs. This 

included the cost-per-visit values for 

each discipline and NRS cost-to-charge 

ratios that fell in the top or bottom 1 

percent of the distribution across all 

HHAs. For this proposed rule, we 

applied the same trimming 

methodology. 

We included both freestanding and 

facility-based HHA Medicare cost report 

data in our rebasing calculations as 

outlined in the CY 2014 HH PPS 

proposed and final rules and in our 

analysis of FY 2015 HHA Medicare cost 

report data for the CY 2018 HH PPS 

proposed rule. We similarly included 

both freestanding and facility-based 

HHA Medicare cost report data in our 

analysis of FY 2016 cost report data for 

this proposed rule. We note that 

although we found an 8 percent 

overstatement of costs from the 

Medicare cost reports audits performed 

to support the rebasing adjustments, we 

did not apply an 8 percent adjustment 

to HHA costs in the CY 2014 HH PPS 

proposed or final rules. We also did not 

apply an 8 percent adjustment to the 

costs in the CY 2018 HH PPS proposed 

rule or in this proposed rule. The 8 

percent overstatement was determined 

using a small sample size of HHA 

Medicare cost reports and the CY 2014 

HH PPS proposed rule included this 

information as illustrative only. The 

information was not used in any cost 

calculations past or present. 

Before trimming, there were 10,394 

cost reports for FY 2016. In this 

proposed rule, we used 7,458 cost 

reports. Of the 7,458 cost reports, 5,447 

(73.4 percent) had both NRS charges 

and costs, 1,672 (22.4 percent) had 

neither NRS charges or costs, and 339 

(4.5 percent) had NRS charges but no 

NRS costs. There were no cost reports 

with NRS costs, but no NRS charges. 

The initial 2017 analytic file included 

6,771,059 episodes. Of these, 959,410 

(14.2 percent) were excluded because 

they could not be linked to OASIS 

assessments or because of the claims 

data cleaning process reasons listed 

above. This yielded a final analytic file 

that included 5,811,649 episodes. Those 

episodes are 60-day episodes under the 

current payment system, but for the 

PDGM those 60-day episodes were 

converted into two 30-day periods. This 

yielded a final PDGM analytic file that 

included 10,160,226, 30-day periods. 

Certain 30-day periods were excluded 

for the following reasons: 

• Inability to merge to certain OASIS 

items to create the episode’s functional 

level that is used for risk adjustment. 

For all the periods in the analytic file, 

there was a look-back through CY 2016 

for a period with a Start of Care or 

Resumption of Care assessment that 

preceded the period being analyzed and 

was in the same sequence of periods. If 

such an assessment was found, it was 

used to impute responses for OASIS 

items that were not included in the 

follow-up assessment. Periods that were 

linked to a follow-up assessment which 

did not link to a Start of Care or 

Resumption of Care assessment using 

the process described above were 

dropped (after exclusions, n = 

9,471,529). 

• No nursing visits or therapy visits 

(after exclusions, n = 9,287,622). 

• LUPAs were excluded from the 

analysis. Periods that are identified as 

LUPAs in the current payment system 

were excluded in the creation of the 

functional score. Following the creation 

of the score (and the corresponding 

levels), case-mix group specific LUPA 

thresholds were created and episodes/ 

periods were excluded that were below 

the new LUPA threshold when 

computing the case-mix weights.26

Therefore, the final analytic sample 

included 8,624,776 30-day periods that 

were used for the analyses in the PDGM. 

In response to the CY 2018 HH PPS 

proposed rule, we received many 

comments stating there was limited 

involvement with the industry in the 

development of the alternative case-mix 

adjustment methodology. Commenters 

also stated that they were unable to 

obtain the necessary data in order to 

replicate and model the effects on their 

business. We note that, through notice 

and comment rulemaking and other 

processes, stakeholders always have the 

opportunity to reach out to CMS and 

provide suggestions for improvement in 

the payment methodology under the HH 

PPS. In the CY 2014 HH PPS final rule, 

we noted that we were continuing to 

work on improvements to our case-mix 

adjustment methodology and welcomed 

suggestions for improving the case-mix 

adjustment methodology as we 

continued in our case-mix research (78 

FR 72287). The analyses and the 

ultimate development of an alternative 

case-mix adjustment methodology was 

shared with stakeholders via technical 

expert panels, clinical workgroups, and 

special open door forums. We also 

provided high-level summaries on our 

case-mix methodology refinement work 

in the HH PPS proposed rules for CYs 

2016 and 2017 (80 FR 39839, and 81 FR 

76702). A detailed technical report was 

posted on the CMS website in December 

of 2016, additional technical expert 

panel and clinical workgroup webinars 

were held after the posting of the 

technical report, and a National 

Provider call occurred in January 2017 


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27Abt Associates. ‘‘Overview of the Home Health 

Groupings Model.’’ Medicare Home Health 

Prospective Payment System: Case-Mix 

Methodology Refinements. Cambridge, MA, 

November 18, 2016. Available at https://

downloads.cms.gov/files/hhgm%20technical%20

report%20120516%20sxf.pdf. 

28Centers for Medicare & Medicaid Services 

(CMS). ‘‘Certifying Patients for the Medicare Home 

Health Benefit.’’ MLN ConnectsTM National 

Provider Call. Baltimore, MD, December 16, 2016. 

Slides, examples, audio recording and transcript 

available at https://www.cms.gov/Outreach-andEducation/Outreach/NPC/National-Provider-Callsand-Events-Items/2017-01-18-HomeHealth.html?DLPage=2&DLEntries=10&DLSort=0&

DLSortDir=descending. 

29https://www.resdac.org/cms-data/request/cmsdata-request-center. 30https://www.cms.gov/center/provider-Type/ 

home-Health-Agency-HHA-Center.html. 

to further solicit feedback from 

stakeholders and the general public.27 28

As noted above, the CY 2018 HH PPS 

proposed rule further solicited 

comments on an alternative case-mix 

adjustment methodology. Ultimately the 

proposed alternative case-mix 

adjustment methodology, including a 

proposed change in the unit of payment 

from 60 days to 30 days, was not 

finalized in the CY 2018 HH PPS final 

rule in order to allow CMS additional 

time to consider public comments for 

potential refinements to the model (82 

FR 51676). 

On February 1, 2018, CMS convened 

another TEP, to gather perspectives and 

identify and prioritize recommendations 

from industry leaders, clinicians, 

patient representatives, and researchers 

with experience with home health care 

and/or experience in home health 

agency management regarding the casemix adjustment methodology 

refinements described in the CY 2018 

HH PPS proposed rule (82 FR 35270), 

and alternative case-mix models 

submitted during 2017 as comments to 

the CY 2018 HH PPS proposed rule. 

During the TEP, there was a description 

and solicitation of feedback on the 

components of the proposed case-mix 

methodology refinement, such as 

resource use, 30-day periods, clinical 

groups, functional levels, comorbidity 

groups, and other variables used to 

group periods into respective case-mix 

groups. Also discussed were the 

comments received from the CY 2018 

HH PPS proposed rule, the creation of 

case-mix weights, and an open 

discussion to solicit feedback and 

recommendations for next steps. This 

TEP satisfied the requirement set forth 

in section 51001(b)(1) of the BBA of 

2018, which requires that at least one 

session of such a TEP be held between 

January 1, 2018 and December 31, 2018. 

Lastly, section 51001(b)(3) of the BBA of 

2018 requires the Secretary to issue a 

report to the Committee on Ways and 

Means and Committee on Energy and 

Commerce of the House of 

Representatives and the Committee on 

Finance of the Senate on the 

recommendations from the TEP 

members, no later than April 1, 2019. 

This report is available on the CMS 

HHA Center web page at: https://

www.cms.gov/center/provider-Type/ 

home-Health-Agency-HHA-Center.html 

and satisfies the requirement of section 

51001(b)(3) of the BBA of 2018. 

Finally, with respect to comments 

regarding the availability of data to 

replicate and model the effects of the 

PDGM on HHAs, we note that generally 

the data needed to replicate and model 

the effects of the proposed PDGM are 

available by request through the CMS 

Data Request Center.29 Although claims 

data for home health are available on a 

quarterly and annual basis as Limited 

Data Set (LDS) files and Research 

Identifiable Files (RIFs); we note that 

assessment data (OASIS) are not 

available as LDS files through the CMS 

Data Request Center. While CMS is able 

to provide LDS files in a more expedited 

manner, it may take several months for 

CMS to provide RIFs. Therefore, we will 

provide upon request a Home Health 

Claims-OASIS LDS file to accompany 

the CY 2019 HH PPS proposed and final 

rules. We believe that in making a Home 

Health Claims-OASIS LDS file available 

upon request in conjunction with the 

CY 2019 HH PPS proposed and final 

rules, this would address concerns from 

stakeholders regarding data access and 

transparency in annual ratesetting. 

The Home Health Claims-OASIS LDS 

file can be requested by following the 

instructions on the following CMS 

website: https://www.cms.gov/ResearchStatistics-Data-and-Systems/Files-forOrder/Data-Disclosures-DataAgreements/DUA_-_NewLDS.html and a 

file layout will be available. This file 

will contain information from claims 

data matched with assessment data for 

CY 2017, both obtained from the 

Chronic Conditions Data Warehouse 

(CCW), and each observation in the file 

will represent a 30-day period of care 

with variables created that provide 

information corresponding to both the 

30-day period of care and the 60-day 

episode of care. The file will also 

contain variables that show the case-mix 

group that a particular claim would be 

grouped into under both the new PDGM 

case-mix methodology and the current 

case-mix adjustment methodology as 

well as variables for all the assessment 

items used for grouping the claim into 

its appropriate case-mix group under 

the PDGM and variables used for 

calculating resource use. Because this 

Home Health Claims-OASIS LDS file 

includes variables used for calculating 

resource use, this file will also include 

publically available data from home 

health cost reports and the BLS. Some 

of the cost data in this file is trimmed 

and imputed before being used as 

outlined above. We note that much of 

the content of the Home Health ClaimsOASIS LDS file will be derived from 

CMS data sources. That is, many 

elements of claims or elements of 

OASIS will not be copied to the LDS file 

as is. For example, we will have 

variables in the data files that will 

record the aggregated number of visits 

and minutes of service by discipline 

type. We will need to create those 

aggregates from the line item data 

available on the claims data. Because we 

will be taking data from different 

sources (claims, OASIS, and cost 

reports/BLS), we will match the data 

across those sources. Information from 

claims and costs reports will be linked 

using the CCN. OASIS assessment data 

will be linked to those sources using 

information available both on the claim 

and OASIS. As noted earlier in this 

section, any episodes that could not be 

linked with an OASIS assessment were 

excluded from the analysis file, as they 

included insufficient patient-level data 

to re-group such episodes into one of 

the 216 case-mix groups under the 

PDGM. 

In addition, similar to the CY 2018 

HH PPS proposed rule, we will again 

provide a PDGM Grouper Tool in 

conjunction with this proposed rule on 

CMS’ HHA Center web page to allow 

HHAs to replicate the PDGM 

methodology using their own internal 

data.30 In addition, in conjunction with 

this proposed rule, we will post a file on 

the HHA Center web page that contains 

estimated Home Health Agency-level 

impacts as a result of the proposed 

PDGM. 

2. Methodology Used To Calculate the 

Cost of Care 

To construct the case-mix weights for 

the PDGM proposal, the costs of 

providing care needed to be determined. 

A Wage-Weighted Minutes of Care 

(WWMC) approach is used in the 

current payment system based on data 

from the BLS. However, we are 

proposing to adopt a Cost-per-Minute 

plus Non-Routine Supplies (CPM + 

NRS) approach, which uses information 

from HHA Medicare Cost Reports and 

Home Health Claims. 

• Home Health Medicare Cost Report 

Data: All Medicare-certified HHAs must 

report their own costs through publiclyVerDate Sep<11>2014 17:39 Jul 11, 2018 Jkt 244001 PO 00000 Frm 00047 Fmt 4701 Sfmt 4702 E:\FR\FM\12JYP2.SGM 12JYP2

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31The trimming methodology is described in the 

report ‘‘Analyses in Support of Rebasing & 

Updating Medicare Home Health Payment Rates’’ 

(Morefield, Christian, and Goldberg 2013). See 

https://www.cms.gov/Medicare/Medicare-Fee-forService-Payment/HomeHealthPPS/Downloads/ 

Analyses-in-Support-of-Rebasing-and-Updatingthe-Medicare-Home-Health-Payment-RatesTechnical-Report.pdf. 

available home health cost reports 

maintained by the Healthcare Cost 

Report Information System (HCRIS). 

Freestanding HHAs report using a HHAspecific cost report while HHAs that are 

hospital-based report using the HHA 

component of the hospital cost reports. 

These cost reports enable estimation of 

the cost per visit by provider and the 

estimated NRS cost to charge ratios. To 

obtain a more robust estimate of cost, a 

trimming process was applied to remove 

cost reports with missing or 

questionable data and extreme values.31

• Home Health Claims Data: 

Medicare home health claims data are 

used in both the previous WWMC 

approach and in the CPM+NRS method 

to obtain minutes of care by discipline 

of care. 

Under the proposed PDGM, we group 

30-day periods of care into their casemix groups taking into account 

admission source, timing, clinical 

group, functional level, and comorbidity 

adjustment. From there, the average 

resource use for each case-mix group 

dictates the group’s case-mix weight. 

We propose that resource use be 

estimated with the cost of visits 

recorded on the home health claim plus 

the cost of NRS recorded on the claims. 

The cost of NRS is generated by taking 

NRS charges on claims and converting 

them to costs using a NRS cost to charge 

ratio that is specific to each HHA. NRS 

costs are then added to the resource use 

estimates. That overall resource use 

estimate is then used to establish the 

case-mix weights. Similar to the current 

system, NRS would still be paid 

prospectively under the PDGM, but the 

PDGM eliminates the separate case-mix 

adjustment model for NRS. 

Under the proposed alternative casemix methodology discussed in the CY 

2018 HH PPS proposed rule, we 

proposed to calculate resource use using 

the CPM+NRS approach (82 FR 35270). 

In response to the CY 2018 HH PPS 

proposed rule, several commenters 

expressed support for the proposed 

change to the CPM+NRS methodology 

used to measure resource use, noting 

that such an approach incorporates a 

wider variety of costs (such as 

transportation) compared to the current 

WWMC approach. Alternatively, other 

commenters responding to last year’s 

proposed rule objected to using 

Medicare cost report data rather than 

Wage-Weighted Minutes of Care 

(WWMC) to calculate resource use. The 

commenters indicated that the strength 

and utility of period-specific cost 

depends on the accuracy and 

consistency of agencies’ reported 

charges, cost-to-charge ratios, and 

period minutes and indicated that they 

believe there are no incentives for 

ensuring the accuracy of HHA cost 

reports, which they believe may result 

in erroneous data. Several commenters 

also indicated that the use of cost report 

data in lieu of WWMC favors facilitybased agencies because they believe that 

facility-based agencies have the ability 

to allocate indirect overhead costs from 

their parent facilities to their service 

cost and argued that the proposed 

alternative case-mix methodology 

would reward inefficient HHAs with 

historically high costs. A few 

commenters stated that Non-Routine 

Supplies (NRS) should not be 

incorporated into the base rate and then 

wage-index adjusted (as would be the 

case if CMS were to use the CPM+NRS 

approach to estimate resource use). The 

commenters stated that HHAs’ supply 

costs are approximately the same 

nationally, regardless of rural or urban 

locations and regardless of the wageindex, and including NRS in the base 

rate will penalize rural providers and 

unnecessarily overpay for NRS in high 

wage-index areas. We note that in 

accordance with the requirement of 

section 51001 of the BBA of 2018, a 

Technical Expert Panel (TEP) convened 

in February 2018 to solicit feedback and 

identify and prioritize recommendations 

from a wide variety of industry experts 

and patient representatives regarding 

the public comments received on the 

proposed alternative case-mix 

adjustment methodology. We received 

similar comments on the approach to 

calculating resource use using the 

CPM+NRS approach, versus the WWMC 

approach, bothin response to the CY 

2018 HH PPS proposed rule and those 

provided by the TEP participants. 

We believe that using HHA Medicare 

cost report data, through the CPM+NRS 

approach, to calculate the costs of 

providing care better reflects changes in 

utilization, provider payments, and 

supply amongst Medicare-certified 

HHAs. Using the BLS average hourly 

wage rates for the entire home health 

care service industry does not reflect 

changes in Medicare home health 

utilization that impact costs, such as the 

allocation of overhead costs when 

Medicare home health visit patterns 

change. Utilizing data from HHA 

Medicare cost reports better represents 

the total costs incurred during a 30-day 

period (including, but not limited to, 

direct patient care contract labor, 

overhead, and transportation costs), 

while the WWMC method provides an 

estimate of only the labor costs (wage 

and fringe benefit costs) related to direct 

patient care from patient visits that are 

incurred during a 30-day period. With 

regards to accuracy, we note that each 

HHA Medicare cost report is required to 

be certified by the Officer or Director of 

the home health agency as being true, 

correct, and complete with potential 

penalties should any information in the 

cost report be a misrepresentation or 

falsification of information. 

As noted above, and in the CY 2018 

HH PPS proposed rule, we applied the 

trimming methodology described in 

detail in the ‘‘Analyses in Support of 

Rebasing & Updating Medicare Home 

Health Payment Rates’’ Report. This is 

also the trimming methodology outlined 

in the CY 2014 HH PPS proposed rule 

(78 FR 40284) in determining the 

rebased national, standardized 60-day 

episode payment amount. For each 

discipline and for NRS used in 

calculating resource use using the 

CPM+NRS approach, we also followed 

the methodology laid out in the 

‘‘Rebasing Report’’ by trimming out 

values that fall in the top or bottom 1 

percent of the distribution across all 

HHAs. This included the cost per visit 

values for each discipline and NRS costto-charge ratios that fall in the top or 

bottom 1 percent of the distribution 

across all HHAs. Normalizing data by 

trimming out missing or extreme values 

is a widely accepted methodology both 

within CMS and amongst the health 

research community and provides a 

more robust measure of average costs 

per visit that is reliable for the purposes 

of establishing base payment amounts 

and case-mix weights under the HH 

PPS. Using HHA Medicare cost report 

data to establish the case-mix weight 

aligns with the use of this data in 

determining the national, standardized 

60-day episode payment amount under 

the HH PPS. 

In response to commenters’ concerns 

regarding the allocation of overhead 

costs by facility-based HHAs, we note 

that a single HHA’s costs impact only a 

portion of the calculation of the weights 

and costs are blended together across all 

HHAs. The payment regression was 

estimated using 8,624,776 30-day 

periods from 10,480 providers. On 

average, each provider contributed 823 

30-day periods to the payment 

regression, which is only 0.010 percent 

of all 30-day periods. Therefore, 

including or excluding any single HHA, 

on average, would not dramatically 


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impact the results of the payment 

regression. Further, facility-based HHAs 

are only 8 percent of HHAs whereas 92 

percent of HHAs are freestanding, and 

coincidentally the percentage of 30-day 

periods furnished by facility-based 

versus freestanding HHAs is also 8 and 

92 percent, respectively. Additionally, 

in the PDGM, we estimate the payment 

regression using provider-level fixed 

effects; therefore we are looking at the 

within provider variation in resource 

use. 

In the CY 2008 HH PPS final rule, 

CMS noted that use of non-routine 

medical supplies is unevenly 

distributed across episodes of care in 

home health. In addition, the majority of 

episodes do not incur any NRS costs 

and, at that time, the current payment 

system overcompensated for episodes 

with no NRS costs. In the CY 2008 HH 

PPS proposed rule, we stated that 

patients with certain conditions, many 

of them related to skin conditions, were 

more likely to require high non-routine 

medical supply utilization (72 FR 

49850), and that we would continue to 

look for ways to improve our approach 

to account for NRS costs and payments 

in the future (72 FR 25428). We believe 

that the proposed PDGM offers an 

alternative method for accounting for 

NRS costs and payments by grouping 

patients more likely to require high NRS 

utilization. For example, while the 

Wound group and Complex Nursing 

Interventions groups comprise about 9 

percent and 4 percent of all 30-day 

periods of care, respectively; roughly 27 

percent of periods where NRS was 

supplied were assigned to the Wound 

and Complex Nursing Interventions 

groups and 44 percent of NRS costs fall 

into the Wound and Complex Nursing 

groups. We note that CY 2017 claims 

data indicates that about 60 percent of 

60-day episodes did not provide any 

NRS. 

In using the CPM + NRS approach to 

calculate the cost of proving care 

(resource use), NRS costs are reflected 

in the average resource use that drives 

the case-mix weights. If there is a high 

amount of NRS cost for all periods in a 

particular group (holding all else equal), 

the resource use for those periods will 

be higher relative to the overall average 

and the case-mix weight will 

correspondingly be higher. Similar to 

the current system, NRS would still be 

paid prospectively under the PDGM, but 

the PDGM eliminates the separate casemix adjustment model for NRS. 

Incorporating the NRS cost into the 

measure of overall resource use (that is, 

the dependent variable of the payment 

model) requires adjusting the NRS 

charges submitted on claims based on 

the NRS cost-to-charge ratio from cost 

report data. 

The following steps would be used to 

generate the measure of resource use 

under this CPM + NRS approach: 

(1) From the cost reports, obtain total 

costs for each of the six home health 

disciplines for each HHA. 

(2) From the cost reports, obtain the 

number of visits by each of the six home 

health disciplines for each HHA. 

(3) Calculate discipline-specific cost 

per visit values by dividing total costs 

[1] by number of visits [2] for each 

discipline for each HHA. For HHAs that 

did not have a cost report available (or 

a cost report that was trimmed from the 

sample), imputed values were used as 

follows: 

• A state-level mean was used if the 

HHA was not hospital-based. The statelevel mean was computed using all nonhospital based HHAs in each state. 

• An urban nationwide mean was 

used for all hospital-based HHAs 

located in a Core-based Statistical Area 

(CBSA). The urban nation-wide mean 

was computed using all hospital-based 

HHAs located in any CBSA. 

• A rural nationwide mean was used 

for all hospital-based HHAs not in a 

CBSA. The rural nation-wide mean was 

computed using all hospital-based 

HHAs not in a CBSA. 

(4) From the home health claims data, 

obtain the average number of minutes of 

care provided by each discipline across 

all episodes for a HHA. 

(5) From the home health claims data, 

obtain the average number of visits 

provided by each discipline across all 

episodes for each HHA. 

(6) Calculate a ratio of average visits 

to average minutes by discipline by 

dividing average visits provided [5] by 

average minutes of care [4] by discipline 

for each HHA. 

(7) Calculate costs per minute by 

multiplying the HHA’s cost per visit [3] 

by the ratio of average visits to average 

minutes [6] by discipline for each HHA. 

(8) Obtain 30-day period costs by 

multiplying costs per minute [7] by the 

total number of minutes of care 

provided during a 30-day period by 

discipline. Then, sum these costs across 

the disciplines for each period. 

This approach accounts for variation 

in the length of a visit by discipline. 

NRS costs are added to the resource use 

calculated in [8] in the following way: 

(9) From the cost reports, determine 

the NRS cost-to-charge ratio for each 

HHA. The NRS ratio is trimmed if the 

value falls in the top or bottom 1 

percent of the distribution across all 

HHAs from the trimmed sample. 

Imputation for missing or trimmed 

values is done in the same manner as it 

was done for cost per visit (see [3] 

above). 

(10) From the home health claims 

data, obtain NRS charges for each 

period. 

(11) Obtain NRS costs for each period 

by multiplying charges from the home 

health claims data [10] by the cost-tocharge ratio from the cost reports [9] for 

each HHA. 

Resource use is then obtained by: 

(12) Summing costs from [8] with 

NRS costs from [11] for each 30-day 

period. 

Table 31 shows these costs for 30-day 

periods in CY 2017 (n = 8,624,776). On 

average, total 30-day period costs as 

measured by resource use are $1,570.68. 

The distribution ranges from a 5th 

percentile value of $296.66 to a 95th 

percentile value of $3,839.91. 

TABLE 31—DISTRIBUTION OF AVERAGE RESOURCE USE USING CPM + NRS APPROACH

[30 Day periods] 

Statistics Mean N 5th 

Percentile 

10th 

Percentile 

25th 

Percentile 

50th 

Percentile 

75th 

Percentile 

90th 

Percentile 

95th 

Percentile 

Average Resource Use (CPM + 

NRS) ...................................... $1,570.68 8,624,776 $296.66 $394.31 $679.12 $1,272.18 $2,117.47 $3,107.93 $3,839.91 

The distributions and magnitude of 

the estimates of costs for the CPM + 

NRS method versus the WWMC method 

are very different. The differences arise 

because the CPM + NRS method 

incorporates HHA-specific costs that 

represent the total costs incurred during 

a 30-day period (including overhead 

costs), while the WWMC method 

provides an estimate of only the labor 

costs (wage + fringe) related to direct 

patient care from patient visits that are 

incurred during a 30-day period. Those 

costs are not HHA-specific and do not 

account for any non-labor costs (such as 


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transportation costs) or the non-direct 

patient care labor costs (such as, 

administration and general labor costs). 

Because the costs estimated using the 

two approaches are measuring different 

items, they cannot be directly 

compared. However, if the total cost of 

a 30-day period is correlated with the 

labor that is provided during visits, the 

two approaches should be highly 

correlated. The correlation coefficient 

(estimated by comparing a 30-day 

period’s CPM + NRS resource use to the 

same period’s WWMC resource use) 

between the two approaches to 

calculating resource use is equal to 

0.8512 (n = 8,624,776). Therefore, the 

relationship in relative costs is similar 

between the two methods. 

Using cost report data to develop 

case-mix weights more evenly weights 

skilled nursing services and therapy 

services than the BLS data. Table 32 

shows the ratios between the estimated 

costs per hour for each of the home 

health disciplines compared with 

skilled nursing resulting from the CPM 

+ NRS versus WWMC methods. Under 

the CPM + NRS methodology, the ratio 

for physical therapy costs per hour to 

skilled nursing is 1.14 compared with 

1.36 using the WWMC method. 

TABLE 32—RELATIVE VALUES IN COSTS PER HOUR BY DISCIPLINE

[Skilled nursing is base] 

Estimated cost per hour Skilled nursing Physical 

therapy 

Occupational 

therapy 

Speech 

therapy 

Medical 

social service 

Home 

health aide 

CPM + NRS ............................................. 1.00 1.14 1.15 1.25 1.39 0.40 

WWMC ..................................................... 1.00 1.36 1.38 1.56 0.94 0.35 

In response to the CY 2018 HH PPS 

proposed rule (82 FR 35270), a few 

commenters, stated that based on their 

operational experiences with clinical 

staffing labor costs, HHA cost report 

data suggests more parity exists between 

skilled nursing (‘‘SN’’) versus physical 

therapist (‘‘PT’’) costs than in fact exists. 

Commenters stated that BLS data 

showing a 40 percent difference 

between SN and PT costs are more 

reflective of the human resources 

experiences in the markets where they 

operate. As such, commenters believe 

the use of cost report data would cause 

the proposed alternative case-mix 

methodology to overpay for nursing 

services and underpay for therapy 

services, although it was not clear from 

the comments why the relative 

relationship in cost between disciplines 

would necessarily mean that nursing 

would be overpaid or underpaid relative 

to therapy. 

We note that the HHA Medicare cost 

report data reflects all labor costs, 

including contract labor costs. The BLS 

data only reflects employed staff. This 

may partially explain why a 40 percent 

variation between SN and PT costs is 

not evident in the cost report data. 

However, the comparison is somewhat 

inappropriate because the BLS data only 

reflects labor costs whereas the HHA 

Medicare cost report data includes labor 

and non-labor costs. As noted earlier in 

Table 32, there is only a 14 percent 

variation using the CPM + NRS 

methodology. Moreover, in aggregate, 

about 15 percent of compensation costs 

are contract labor costs and this varies 

among the disciplines with contract 

labor costs accounting for a much higher 

proportion of therapy visit costs 

compared to skilled nursing visit costs. 

Utilization also varies among 

freestanding providers with smaller 

providers having a higher proportion of 

contract labor costs, particularly for 

therapy services compared to larger 

providers. The decision of whether to/ 

or what proportion of contract labor to 

use is at the provider’s discretion. 

Finally, we note that in order to be 

eligible for Medicare HH PPS payments, 

providers must complete the HHA 

Medicare cost report and certify the 

report by the Officer or Director of the 

home health agency as being true, 

correct, and complete; therefore, such 

data can and should be used to calculate 

the cost of care. 

We have determined that using cost 

report data to calculate the cost of home 

health care better aligns the case-mix 

weights with the total relative cost for 

treating various patients. In addition, 

using cost report data allows us to 

incorporate NRS into the case-mix 

system, rather than maintaining a 

separate payment system. Therefore, we 

are re-proposing to calculate the cost of 

a 30-day period of home health care 

under the proposed PDGM using the 

cost per minute plus non-routine 

supplies (CPM + NRS) approach 

outlined above, as also outlined in the 

CY 2018 proposed rule. We invite 

comments on the proposed 

methodology for calculating the cost of 

a 30-day period of care under the 

PDGM. 

3. Change From a 60-Day to a 30-Day 

Unit of Payment 

a. Background 

Currently, HHAs are paid for each 60- 

day episode of home health care 

provided. In the CY 2018 HH PPS 

proposed rule, CMS proposed a change 

from making payment based on 60-day 

episodes to making payment based on 

30-day periods, effective for January 1, 

2019. Examination of the resources used 

within a 60-day episode of care 

identified differences in resources used 

between the first 30-day period within 

a 60-day episode and the second 30-day 

period within a 60-day episode. 

Episodes have more visits, on average, 

during the first 30 days compared to the 

last 30 days and costs are much higher 

earlier in the episode and lesser later on; 

therefore, dividing a single 60-day 

episode into two 30-day periods more 

accurately apportioned payments. In 

addition, with the proposed removal of 

therapy thresholds from the case-mix 

adjustment methodology under the HH 

PPS, a shorter period of care reduced 

the variation and improved the accuracy 

of the case-mix weights generated under 

the PDGM. CMS did not finalize the 

implementation of a 30-day unit of 

payment in the CY 2018 HH PPS final 

rule (82 FR 51676). 

Section 1895(b)(2)(B) of the Act, as 

added by section 51001(a)(1) of the BBA 

of 2018, requires the Secretary to apply 

a 30-day unit of service for purposes of 

implementing the HH PPS, effective 

January 1, 2020. We note that we 

interpret the term ‘‘unit of service’’ to be 

synonymous with ‘‘unit of payment’’ 

and will henceforth refer to ‘‘unit of 

payment’’ in this proposed rule with 

regards to payment under the HH PPS. 

We propose to make HH payments 

based on a 30-day unit of payment 

effective January 1, 2020. While we are 

proposing to change to a 30-day unit of 

payment, we note that the 

comprehensive assessment would still 

be completed within 5 days of the start 

of care date and completed no less 

frequently than during the last 5 days of 

every 60 days beginning with the start 

of care date, as currently required by 

§ 484.55, Condition of participation: 

Comprehensive assessment of patients. 


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32Current data suggest that what would be about 1⁄3 of the LUPA episodes with visits near the LUPA 

threshold move up to become non-LUPA episodes. 

We assume this experience will continue under the 

PDGM, with about 1⁄3 of those episodes 1 or 2 visits 

below the thresholds moving up to become nonLUPA episodes. 

33The initial 2017 analytic file included 

6,771,059 60-day episodes ($18.2 billion in total 

expenditures). Of these, 959,410 (14.2 percent) were 

excluded because they could not be linked to 

OASIS assessments or because of the claims data 

cleaning process reasons listed in section III.F.1 of 

this proposed rule. We note that of the 959,410 

claims excluded, 620,336 were excluded because 

they were RAPs without a final claim or they were 

claims with zero payment amounts, resulting in 

$17.4 billion in total expenditures. After removing 

all 959,410 excluded claims, the 2017 analytic file 

consisted of 5,811,649 60-day episodes ($16.4 

billion in total expenditures). 60-day episodes of 

duration longer than 30 days were divided into two 

30-day periods in order to calculate the 30-day 

payment amounts. As noted in section III.F.1 of this 

proposed rule, there were instances where 30-day 

periods were excluded from the 2017 analytic file 

(for example, we could not match the period to a 

start of care or resumption of care OASIS to 

determine the functional level under the PDGM, the 

30-day period did not have any skilled visits, or 

because information necessary to calculate payment 

was missing from claim record). The final 2017 

analytic file used to calculate budget neutrality 

consisted of 9,285,210 30-day periods ($16.1 billion 

in total expenditures) drawn from 5,456,216 60-day 

episodes. 

In addition, the plan of care would still 

be reviewed and revised by the HHA 

and the physician responsible for the 

home health plan of care no less 

frequently than once every 60 days, 

beginning with the start of care date, as 

currently required by § 484.60(c), 

Condition of participation: Care 

planning, coordination of services, and 

quality of care. 

b. 30-Day Unit of Payment 

Under section 1895(b)(3)(A)(iv) of the 

Act, we are required to calculate a 30- 

day payment amount for CY 2020 in a 

budget neutral manner such that 

estimated aggregate expenditures under 

the HH PPS during CY 2020 are equal 

to the estimated aggregate expenditures 

that otherwise would have been made 

under the HH PPS during CY 2020 in 

the absence of the change to a 30-day 

unit of payment. Furthermore, as also 

required by section 1895(b)(3)(A)(iv) of 

the Act, to calculate a 30-day payment 

amount in a budget-neutral manner, we 

are required to make assumptions about 

behavior changes that could occur as a 

result of the implementation of the 30- 

day unit of payment. In addition, in 

calculating a 30-day payment amount in 

a budget-neutral manner, we must take 

into account behavior changes that 

could occur as a result of the case-mix 

adjustment factors that are implemented 

in CY 2020. We are also required to 

calculate a budget-neutral 30-day 

payment amount before the provisions 

of section 1895(b)(3)(B) of the Act are 

applied, that is, the home health 

applicable percentage increase, the 

adjustment for case-mix changes, the 

adjustment if quality data is not 

reported, and the productivity 

adjustment. 

In calculating the budget-neutral 30- 

day payment amount, we propose to 

make three assumptions about behavior 

change that could occur in CY 2020 as 

a result of the implementation of the 30- 

day unit of payment and the 

implementation of the PDGM case-mix 

adjustment methodology outlined in 

this proposed rule: 

• Clinical Group Coding: A key 

component of determining payment 

under the PDGM is the 30-day period’s 

clinical group assignment, which is 

based on the principal diagnosis code 

for the patient as reported by the HHA 

on the home health claim. Therefore, we 

assume that HHAs will change their 

documentation and coding practices 

and would put the highest paying 

diagnosis code as the principal 

diagnosis code in order to have a 30-day 

period be placed into a higher-paying 

clinical group. While we do not support 

or condone coding practices or the 

provision of services solely to maximize 

payment, we often take into account 

expected behavioral effects of policy 

changes related to the implementation 

of the proposed rule. 

• Comorbidity Coding: The PDGM 

further adjusts payments based on 

patients’ secondary diagnoses as 

reported by the HHA on the home 

health claim. While the OASIS only 

allows HHAs to designate 1 primary 

diagnosis and 5 secondary diagnoses, 

the home health claim allows HHAs to 

designate 1 principal diagnosis and 24 

secondary diagnoses. Therefore, we 

assume that by taking into account 

additional ICD–10–CM diagnosis codes 

listed on the home health claim (beyond 

the 6 allowed on the OASIS), more 30- 

day periods of care will receive a 

comorbidity adjustment than periods 

otherwise would have received if we 

only used the OASIS diagnosis codes for 

payment. The comorbidity adjustment 

in the PDGM can increase payment by 

up to 20 percent. 

• LUPA Threshold: Rather than being 

paid the per-visit amounts for a 30-day 

period of care subject to the lowutilization payment adjustment (LUPA) 

under the proposed PDGM, we assume 

that for one-third of LUPAs that are 1 to 

2 visits away from the LUPA threshold 

HHAs will provide 1 to 2 extra visits to 

receive a full 30-day payment.32 LUPAs 

are paid when there are a low number 

of visits furnished in a 30-day period of 

care. Under the PDGM, the LUPA 

threshold ranges from 2–6 visits 

depending on the case-mix group 

assignment for a particular period of 

care (see section F.9 of this proposed 

rule for the LUPA thresholds that 

correspond to the 216 case-mix groups 

under the PDGM). 

Table 33 includes estimates of what 

the 30-day payment amount would be 

for CY 2019 (using CY 2017 home 

health utilization data) in order to 

achieve budget neutrality both with and 

without behavioral assumptions and 

including the application of the 

proposed home health payment update 

percentage of 2.1 percent outlined in 

section C.2 of this proposed rule. We 

note that these are only estimates to 

illustrate the 30-day payment amount if 

we had proposed to implement the 30- 

day unit of payment and the proposed 

PDGM for CY 2019. However, because 

we are proposing to implement the 30- 

day unit of payment and proposed 

PDGM for CY 2020, we would propose 

the actual 30-day payment amount in 

the CY 2020 HH PPS proposed rule 

calculated using CY 2018 home health 

utilization data, and we would calculate 

this amount before application of the 

proposed home health update 

percentage required for CY 2020 (as 

required by section 1895(b)(3)(iv) of the 

Act). In order to calculate the budget 

neutral 30-day payment amounts in this 

proposed rule, both with and without 

behavioral assumptions, we first 

calculated the total, aggregate amount of 

expenditures that would occur under 

the current case-mix adjustment 

methodology (as described in section 

III.B. of this rule) and the 60-day 

episode unit of payment using the 

proposed CY 2019 payment parameters 

(e.g., proposed 2019 payment rates, 

proposed 2019 case-mix weights, and 

outlier fixed-dollar loss ratio). That 

resulted in a total aggregate 

expenditures target amount of $16.1 

billion.33 We then calculated what the 

30-day payment amount would need to 

be set at in CY 2019, with and without 

behavior assumptions, while taking into 

account needed changes to the outlier 

fixed-dollar loss ratio under the PDGM 

in order to pay out no more than 2.5 

percent of total HH PPS payments as 

outlier payments (refer to section 

III.F.12 of this proposed rule) and in 

order for Medicare to pay out $16.1 

billion in total expenditures in CY 2019 

with the application of a 30-day unit of 

payment under the PDGM. 


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TABLE 33—ESTIMATES OF 30-DAY BUDGET-NEUTRAL PAYMENT AMOUNTS

Behavioral assumption 

30-day budget 

neutral (BN) 

standard 

amount 

Percent 

change from 

no behavioral 

assumptions 

No Behavioral Assumptions .................................................................................................................................... $1,873.91 ........................

LUPA Threshold (1⁄3 of LUPAs 1–2 visits away from threshold get extra visits and become case-mix adjusted) 1,841.05 ¥1.75 

Clinical Group Coding (among available diagnoses, one leading to highest payment clinical grouping classification designated as principal) .......................................................................................................................... 1,793.69 ¥4.28 

Comorbidity Coding (assigns comorbidity level based on comorbidities appearing on HHA claims and not just 

OASIS) ................................................................................................................................................................. 1,866.76 ¥0.38 

Clinical Group Coding + Comorbidity Coding ......................................................................................................... 1,786.54 ¥4.66 

Clinical Group Coding + Comorbidity Coding + LUPA Threshold .......................................................................... 1,753.68 ¥6.42 

If no behavioral assumptions were 

made, we estimate that the 30-day 

payment amount needed to achieve 

budget neutrality would be $1,873.91. 

The clinical group and comorbidity 

coding assumptions would result in the 

need to decrease the budget-neutral 30- 

day payment amount to $1,786.54 (a 

4.66 percent decrease from $1,873.91). 

Adding the LUPA assumption would 

require us to further decrease that 

amount to $1,753.68 (a 6.42 percent 

decrease from $1,873.91). 

We note that we are also required 

under section 1895(b)(3)(D)(i) of the Act, 

as added by section 51001(a)(2)(B) of the 

BBA of 2018, to analyze data for CYs 

2020 through 2026, after 

implementation of the 30-day unit of 

payment and new case-mix adjustment 

methodology, to annually determine the 

impact of differences between assumed 

behavior changes and actual behavior 

changes on estimated aggregate 

expenditures. We interpret actual 

behavior change to encompass both 

behavior changes that were outlined 

above, as assumed by CMS when 

determining the budget-neutral 30-day 

payment amount for CY 2020, and other 

behavior changes not identified at the 

time the 30-day payment amount for CY 

2020 is determined. The data from CYs 

2020 through 2026 will be available to 

determine whether a prospective 

adjustment (increase or decrease) is 

needed no earlier than in years 2022 

through 2028 rulemaking. As noted 

previously, under section 

1895(b)(3)(D)(ii) of the Act, we are 

required to provide one or more 

permanent adjustments to the 30-day 

payment amount on a prospective basis, 

if needed, to offset increases or 

decreases in estimated aggregate 

expenditures as calculated under 

section 1895(b)(3)(D)(i) of the Act. 

Clause (iii) of section 1895(b)(3)(D) of 

the Act requires the Secretary to make 

temporary adjustments to the 30-day 

payment amount, on a prospective 

basis, in order to offset increases or 

decreases in estimated aggregate 

expenditures, as determined under 

clause (i) of such section. The temporary 

adjustments allow us to recover excess 

spending or give back the difference 

between actual and estimated spending 

(if actual is less than estimated) not 

addressed by permanent adjustments. 

For instance, if expenditures are 

estimated to be $18 billion in CY 2020, 

but expenditures are actually $18.25 

billion in CY 2020, then we can reduce 

payments (temporarily) in the future to 

recover the $250 million. 

As noted above, section 

1895(b)(3)(A)(iv) of the Act requires the 

Secretary to calculate a budget-neutral 

30-day payment amount to be paid for 

home health units of service that are 

furnished and end during the 12-month 

period beginning January 1, 2020. For 

implementation purposes, we propose 

that the 30-day payment amount would 

be paid for home health services that 

start on or after January 1, 2020. More 

specifically, for 60-day episodes that 

begin on or before December 31, 2019 

and end on or after January 1, 2020 

(episodes that would span the January 1, 

2020 implementation date), payment 

made under the Medicare HH PPS 

would be the CY 2020 national, 

standardized 60-day episode payment 

amount. For home health units of 

service that begin on or after January 1, 

2020, the unit of service would now be 

a 30-day period and payment made 

under the Medicare HH PPS would be 

the CY 2020 national, standardized 

prospective 30-day payment amount. 

For home health units of service that 

begin on or after December 2, 2020 

through December 31, 2020 and end on 

or after January 1, 2021, the HHA would 

be paid the CY 2021 national, 

standardized prospective 30-day 

payment amount. 

We are soliciting comments on our 

proposals, including the proposed 

behavior change assumptions outlined 

above to be used in determining the 30- 

day payment amount for CY 2020 and 

the corresponding regulation text 

changes outlined in section III.F.13 and 

IX. of this proposed rule. 

c. Split Percentage Payment Approach 

for a 30-Day Unit of Payment 

In the current HH PPS, there is a split 

percentage payment approach to the 60- 

day episode. The first bill, a Request for 

Anticipated Payment (RAP), is 

submitted at the beginning of the initial 

episode for 60 percent of the anticipated 

final claim payment amount. The 

second, final bill is submitted at the end 

of the 60-day episode for the remaining 

40 percent. For all subsequent episodes 

for beneficiaries who receive continuous 

home health care, the episodes are paid 

at a 50/50 percentage payment split. 

In the CY 2018 HH PPS proposed rule 

(82 FR 35270), we solicited comments 

as to whether the split payment 

approach would still be needed for 

HHAs to maintain adequate cash flow if 

the unit of payment changes from 60- 

day episodes to 30-day periods of care. 

In addition, we solicited comments on 

ways to phase-out the split percentage 

payment approach in the future. 

Specifically, we solicited comments on 

reducing the percentage of the upfront 

payment over a period of time and if in 

the future the split percentage approach 

was eliminated, we solicited comments 

on the need for HHAs to submit a notice 

of admission (NOA) within 5 days of the 

start of care to assure being established 

as the primary HHA for the beneficiary 

and so that the claims processing system 

is alerted that a beneficiary is under a 

HH period of care to enforce the 

consolidating billing edits as required 

by law. Commenters generally 

expressed support for continuing the 

split percentage payment approach in 

the future under the proposed 

alternative case-mix model. While we 

solicited comments on the possibility of 

phasing-out the split percentage 

payment approach in the future and the 

need for a NOA, commenters did not 

provide suggestions for a phase-out 

approach, but stated that they did not 

agree with requiring a NOA given the 


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experience with such a process under 

the Medicare hospice benefit. 

While CMS did not finalize the 

implementation of a 30-day unit of 

payment in the CY 2018 HH PPS final 

rule (82 FR 51676), the BBA of 2018 

now requires a change to the unit of 

payment from a 60-day episode to a 30- 

day period of care, as outlined in 

section F.3.b above, effective January 1, 

2020. We continue to believe that as a 

result of the reduced timeframe for the 

unit of payment, that a split percentage 

approach to payment may not be needed 

for HHAs to maintain adequate cash 

flow. Currently, about 5 percent of 

requests for anticipated payment are not 

submitted until the end of a 60-day 

episode of care and the median length 

of days for RAP submission is 12 days 

from the start of the 60-day episode. As 

such, we are reevaluating the necessity 

of RAPs for existing and newly-certified 

HHAs versus the risks they pose to the 

Medicare program. 

RAP payments can result in program 

integrity vulnerabilities. For example, a 

final claim was never submitted for 

$321 million worth of RAP payments 

between July 1, 2015 and July 31, 2016. 

While CMS typically can recoup RAP 

overpayments from providers that 

continue to submit final claims to the 

Medicare program, some fraud schemes 

have involved collecting these RAP 

payments, never submitting final 

claims, and closing the HHA before 

Medicare can take action. Below are two 

examples of HHAs that were identified 

for billing large amounts of RAPs with 

no final claim: 

• Provider 1 is a Home Health Agency 

located in Michigan. It was identified 

for submitting home health claims for 

beneficiaries located in California and 

Florida. Further analysis found that the 

HHA was submitting RAPs with no final 

claims. CMS discovered that the address 

on record for the HHA was vacant for 

an extended period of time. In addition, 

CMS determined that although Provider 

1 had continued billing and receiving 

payments for RAP claims, it had not 

submitted a final claim in 10 months. 

Ultimately, the HHA submitted a total of 

$50,234,430.36 in RAP payments and 

received $37,204,558.80 in RAP 

payments. In addition to the large 

amount of money paid to the HHA, 

Medicare beneficiaries were also 

impacted by the HHA’s billing behavior. 

For example, a Florida beneficiary who 

needed home health services was 

unable to receive the care required due 

to the RAP submission by this Provider. 

• Provider 2 is a Home Health Agency 

that is also located in Michigan that 

submitted a significant number of RAPs 

with no final claim. While the majority 

of these beneficiaries were located in 

Michigan, data analysis identified 

beneficiaries who were not likely 

homebound or qualified for home health 

services. CMS discovered that the 

address on record for the HHA was 

vacant. Provider 2 had not submitted 

any final claims in more than one year 

and was no longer billing the Medicare 

program. However, the HHA was paid a 

total of $5,765,261.04 in RAP payments 

that had no final claim. 

Given the program integrity concerns 

outlined above and the reduced 

timeframe for the unit of payment (30- 

days rather than 60-days), we are 

proposing not to allow newly-enrolled 

HHAs, that is HHAs certified for 

participation in Medicare effective on or 

after January 1, 2019, to receive RAP 

payments beginning in CY 2020. This 

would allow newly-enrolled HHAs to 

structure their operations without 

becoming dependent on a partial, 

advanced payment and take advantage 

of receiving full payments for every 30- 

day period of care. We are proposing 

that HHAs, that are certified for 

participation in Medicare effective on or 

after January 1, 2019, would still be 

required to submit a ‘‘no pay’’ RAP at 

the beginning of care in order to 

establish the home health episode, as 

well as every 30-days thereafter. RAP 

submissions are currently operationally 

significant as the RAP establishes the 

HHA as the primary HHA for the 

beneficiary during that timeframe and 

alerts the claims processing system that 

a beneficiary is under the care of an 

HHA to enforce the consolidating billing 

edits required by law under section 

1842(b)(6)(F) of the Act. Without such 

notification, there would be an increase 

in denials of claims subject to the home 

health consolidated billing edits that are 

prevented when an episode/period is 

established in the common working file 

(CWF) by the RAP, potentially resulting 

in increases in appeals, and increases in 

situations where other providers, 

including other HHAs, would not have 

easy information on whether a patient 

was already being served by an HHA. 

CMS invites comments on whether the 

burden of submitting a ‘‘no-pay’’ RAP 

by newly-enrolled HHAs outweighs the 

risks to the Medicare program and 

providers associated with not 

submitting them. 

We propose that existing HHAs, that 

is HHAs certified for participation in 

Medicare with effective dates prior to 

January 1, 2019, would continue to 

receive RAP payments upon 

implementation of the 30-day unit of 

payment and the proposed PDGM casemix adjustment methodology in CY 

2020. However, we are again soliciting 

comments on ways to phase-out the 

split percentage payment approach in 

the future given that CMS is required to 

implement a 30-day unit of payment 

beginning on January 1, 2020 as 

outlined above. Specifically, we are 

soliciting comments on reducing the 

percentage of the upfront payment 

incrementally over a period of time. If 

in the future the split percentage 

approach was eliminated, we are also 

soliciting comments on the need for 

HHAs to submit a NOA within 5 days 

of the start of care to assure being 

established as the primary HHA for the 

beneficiary during that timeframe and 

so that the claims processing system is 

alerted that a beneficiary is under a HH 

period of care to enforce the 

consolidating billing edits as required 

by law. As outlined above, there are 

significant drawbacks to both Medicare 

and providers of not establishing a NOA 

process upon elimination of RAPs. 

In summary, we invite comments on 

the change in the unit of payment from 

a 60-day episode of care to a 30-day 

period of care; the proposed calculation 

of the 30-day payment amount in a 

budget-neutral manner and behavior 

change assumptions for CY 2020; the 

proposed interpretation of the statutory 

language regarding actual behavior 

change; the proposal not to allow 

newly-enrolled HHAs (HHAs certified 

for participation in Medicare effective 

on or after January 1, 2019) to receive 

RAP payments upon implementation of 

the 30-day unit of payment in CY 2020, 

yet still require the submission of a ‘‘no 

pay’’ RAP at the beginning of care; the 

proposal to maintain the split 

percentage payment approach for 

existing HHAs and applying such policy 

to 30-day periods of care; and the 

associated regulations text changes 

outlined in section III.F.13 and IX of 

this proposed rule. We are also 

soliciting comments on ways the split 

percentage payment approach could be 

phased-out and whether to implement a 

NOA process if the split percentage 

payment approach is eliminated in the 

future. 

4. Timing Categories 

In the CY 2018 HH PPS proposed 

rule, we described analysis showing the 

impact of timing on home health 

resource use and proposed to classify 

the 30-day periods under the proposed 

alternative case-mix adjustment 

methodology as ‘‘early’’ or ‘‘late’’ 

depending on when they occur within 

a sequence of 30-day periods (82 FR 

35307). Under the current HH PPS, the 

first two 60-day episodes of a sequence 

of adjacent 60-day episodes are 

considered early, while the third 60-day 


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episode of that sequence and any 

subsequent episodes are considered late. 

Under the alternative case-mix 

adjustment methodology, we proposed 

that the first 30-day period would be 

classified as early and all subsequent 

30-day periods in the sequence (second 

or later) would be classified as late. 

Similar to the current payment system, 

we proposed that a 30-day period could 

not be considered early unless there was 

a gap of more than 60 days between the 

end of one period and the start of 

another, or it was the first period in a 

sequence of periods in which there was 

no more than 60 days between the end 

of that period and the start of the next 

period. 

In response to the CY 2018 HH PPS 

proposed rule, several commenters were 

supportive of the inclusion of the timing 

category in the alternative case-mix 

adjustment methodology, stating that 

this differentiation would reflect that 

HHA costs are typically highest during 

the first 30 days of care. However, other 

commenters expressed concerns 

regarding timing, stating that HHAs may 

modify the ways in which they provide 

care, that the change would cause a 

decrease in overall payment to HHAs 

and an increase in hospital 

readmissions, and that the categories 

would not account for increased costs in 

the later periods of care. Several 

commenters described concerns 

regarding the potential for problematic 

provider behavior due to financial 

incentives as well as the potential for 

problems with operational aspects of the 

timing element of the alternative casemix adjustment methodology. 

Additionally, some commenters 

suggested that we modify the definition 

of an ‘‘early’’ 30-day period to either the 

first two 30-day periods or the first four 

30-days of care, stating that those 

definitions would more closely mirror 

the current payment system’s definition 

of ‘‘early’’ and that HHAs would 

otherwise experience a payment 

decrease when compared to the current 

60-day episode payment amount. 

As described in detail in the CY 2018 

HH PPS proposed rule, our proposal 

regarding the timing element of the 

alternative case-mix adjustment 

methodology was intended to refine and 

to better fit costs incurred by agencies 

for patients with differing 

characteristics and needs under the HH 

PPS (82 FR 35270). Analysis of home 

health data demonstrates that under the 

current payment system, when analyzed 

by 30-day periods, HHAs provide more 

resources in the first 30-day period of 

home health (‘‘early’’) than in later 

periods of care. The differences in the 

average resource use during early and 

late home health episodes when divided 

into 30-day periods are presented in 

Table 34, and shows the first 30-day 

periods in a home health sequence have 

significantly higher average resource use 

at $2,113.66 as compared with 

subsequent 30-day periods. Specifically, 

the later 30-day periods showed an 

average resource use of $1,311.73, a 

difference of more than $800 or a 38 

percent decrease. Table 34 also shows a 

significant difference between the early 

and late median values of resource use. 

The median for the first 30-day period 

is $1,866.79, while the median for 

subsequent 30-day periods is $987.94, a 

difference of more than $878 or an 

approximately 47 percent decrease. 

TABLE 34—AVERAGE RESOURCE USE BY TIMING

[30-Day periods] 

Timing 

Average 

resource use 

Frequency 

of periods 

Percent 

of periods 

Standard 

deviation of 

resource use 

25th 

percentile of 

resource use 

Median 

resource use 

75th 

percentile of 

resource use 

Early 30-Day Periods ................................................................ $2,113.66 2,785,039 32.3 $1,236.30 $1,232.23 $1,866.79 $2,707.04 

Late 30-Day Periods ................................................................. 1,311.73 5,839,737 67.7 1,125.44 534.82 987.94 1,735.69 

Total ................................................................................... 1,570.68 8,624,776 100.0 1,221.38 679.12 1,272.18 2,117.47 

Source: CY 2017 Medicare claims data for episodes ending on or before December 31, 2017 (as of March 2, 2018). 

There is significant difference in the 

resource utilization between early and 

late 30-day periods as demonstrated in 

Table 34. Moreover, the predictive 

power of the proposed PDGM in terms 

of estimating resource utilization 

improved when separating episodes into 

30-day periods rather than 60-day 

periods (that is, the first and second 30- 

day periods). We believe that a PDGM 

that accounts for the demonstrated 

increase in resource utilization in the 

first 30-day period better captures the 

variations in resource utilization and 

further promotes the goal of payment 

accuracy within the HH PPS. 

Moreover, we note that the resource 

cost estimates are derived from a very 

large, representative dataset. Therefore, 

we expect that the proposal reflects 

agencies’ average costs for all home 

health service delivered in the period 

examined. We have constructed the 

revised case-mix adjustment model 

based upon the actual resources 

expended by home health agencies for 

Medicare beneficiaries, which show that 

typically HHAs provide more visits 

during the first 30 days of care and 

utilize less resources thereafter. We 

reiterate that the timing categories are 

reflective of the utilization patterns 

observed in the data analyzed for the 

purposes of constructing the PDGM. The 

weights of the two timing categories are 

driven by the mix of services provided, 

the costs of services provided as 

determined by cost report data, the 

length of the visits, and the number of 

visits provided. The categorization of 

30-day periods as ‘‘early’’ and ‘‘late’’ 

serves to better align payments with 

already existing resource use patterns. 

This alignment of payment with 

resource use is not to be interpreted as 

placing a value judgment on particular 

care patterns or patient populations. 

Our goal in developing the PDGM is to 

provide an appropriate payment based 

on the identified resource use of 

different patient groups, not to 

encourage, discourage, value, or devalue 

one type of skilled care over another. 

For the reasons described above, we 

are proposing to classify the 30-day 

periods under the proposed PDGM as 

‘‘early’’ or ‘‘late’’ depending on when 

they occur within a sequence of 30-day 

periods. For the purposes of defining 

‘‘early’’ and ‘‘late’’ periods for the 

proposed PDGM, we are proposing that 

only the first 30-day period in a 

sequence of periods be defined as 

‘‘early’’ and all other subsequent 30-day 

periods would be considered ‘‘late’’. 

Additionally, we are proposing that the 

definition of a ‘‘home health sequence’’ 

(as currently described in § 484.230) 

will remain unchanged relative to the 

current system, that is, 30-day periods 

are considered to be in the same 

sequence as long as no more than 60 

days pass between the end of one period 

and the start of the next, which is 

consistent with the definition of a 

‘‘home health spell of illness’’ described 

at section 1861(tt)(2) of the Act. We note 


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34http://www.medpac.gov/docs/default-source/ 

reports/chapter-8-home-health-care-services-march2016-report-.pdf. 

that because section 1861(tt)(2) of the 

Act is a definition related to eligibility 

for home health services as described at 

section 1812(a)(3) of the Act, it does not 

affect or restrict our ability to 

implement a 30-dayunit of payment. 

At this time, the data do not support 

the notion that the first two 30-day 

periods should be defined as early, as 

only the first 30-day period presents 

marked increase in resource use. We 

believe the PDGM’s definition of ‘‘early’’ 

as the first 30-day period most 

accurately reflects agencies’ average 

costs for patients with characteristics 

measured on the OASIS and used in 

defining payment groups and supports 

the shift from the current ‘‘early’’ 

category as defined by two 60-day 

episodes. We continue to believe that a 

PDGM that accounts for the actual, 

demonstrated increase in resource 

utilization in the first 30-day period 

better captures the variations in 

resource utilization. 

Additionally, in our CY 2008 HH PPS 

final rule, we implemented an ‘‘early’’ 

and ‘‘late’’ distinction in the HH PPS in 

which the late episode groupings were 

weighted more heavily than those 

episodes designated as early due to 

heavier resource use during later 

episodes (72 FR 49770). At that time, 

commenters expressed concerns that 

this heavier weighting for later episodes 

could lead to gaming by providers, with 

patients on service longer than would be 

appropriate, and providers not 

discharging patients when merited. 

During our analysis in support of 

subsequent refinements to the HH PPS 

in 2015, we analyzed the utilization 

patterns observed in the CY 2013 claims 

data and observed that the resource use 

for later episodes had indeed shifted 

such that later episodes had less 

resource use than earlier periods, which 

was the opposite of the pattern observed 

prior to CY 2008. Furthermore, in its 

2016 Report to Congress, MedPAC noted 

that, between 2002 and 2014, a pattern 

in home health emerged where the 

number of episodes of care provided to 

home health beneficiaries trended 

upwards, with the average number of 

episodes per user increasing by 18 

percent, rising from 1.6 to 1.9 episodes 

per user.34 MedPAC noted that this 

upward trajectory coincided with, 

among other changes, higher payments 

for the third and later episodes in a 

consecutive spell of home health 

episodes. Given the longitudinal 

variation in terms of resource provision 

during home health episodes, we 

believe that restricting the ‘‘early’’ 

definition to the first 30-day period is 

most appropriate for this facet of the 

PDGM. Our analysis of home health 

resource use as well as comments from 

the public that confirm that more 

resources are provided in the first 30 

days provide compelling evidence to 

limit the definition of early to the first 

30-day period. 

Moreover, the public comments we 

received in response to the CY 2018 HH 

PPS proposed rule presented conflicting 

predictions regarding anticipated 

provider behavior in response to the 

implementation of the alternative casemix adjustment methodology. Several 

commenters stated that they expected 

providers to discharge patients after the 

first 30-days of care, given that the casemix weights are, on average, higher for 

the first 30-days of care. Other 

commenters expressed concern that 

providers may attempt to keep home 

health beneficiaries on service for as 

long as possible. Additionally, meeting 

the requirement of section 51001 of the 

BBA of 2018, a Technical Expert Panel 

(TEP) was convened in February 2018 to 

solicit feedback and identify and 

prioritize recommendations from a wide 

variety of industry experts and patient 

representatives regarding the public 

comments received on the proposed 

alternative case-mix adjustment 

methodology. Comments on the timing 

categories and suggestions for 

refinement to this adjustment were very 

similar between those received on the 

CY 2018 HH PPS proposed rule and 

those made by the TEP participants. We 

note the PDGM case-mix weights reflect 

existing patterns of resource use 

observed in our analyses of CY 2016 

home health claims data. Since we 

propose to recalibrate the PDGM casemix weights on an annual basis to 

ensure that the case-mix weights reflect 

the most recent utilization data 

available at the time of rulemaking, 

future recalibrations of the PDGM casemix weights may result in changes to 

the case-mix weights for early versus 

late 30-day periods of care as a result of 

changes in utilization patterns. 

Several commenters responding to the 

CY 2018 HH PPS proposed rule 

suggested that we revise the model such 

that a readmission to home health 

within the 60-day gap period results in 

an ‘‘early’’ instead of a ‘‘late’’ 30-day 

period. However, we note that the 

PDGM also includes a category 

determined specifically by source of 

admission, which would account for 

any readmission to home health. Under 

the PDGM we already account for 

whether the patient was admitted to 

home health care from the community 

or following an institutional stay, 

including inpatient stays that occur after 

the commencement of a home health 

care. For example, if the original home 

health stay was categorized as 

community and subsequently the 

patient experienced an inpatient stay, 

the subsequent home health stay would 

reset to institutional upon discharge 

from the inpatient setting. Similarly, we 

note that for the purposes of the timing 

component of the PDGM, an intervening 

hospital stay would not trigger recategorization to an ‘‘early’’ period 

unless there were a 60-day gap in home 

health care. Therefore, we do not 

believe that the timing element of the 

PDGM would create a financial 

incentive to inappropriately encourage 

the admission of home health patients 

to an acute care setting in order to 

receive a subsequent home health 

referral in the higher-paid ‘‘early’’ 

category. Our proposal was intended to 

refine and to better fit costs incurred by 

agencies for patients with differing 

characteristics and needs under the 

prospective payment system. Therefore, 

we expect that the addition of both the 

source of admission, as well as the 

timing categories do reflect agencies’ 

average costs for home health patients 

and used in defining payment groups. 

We believe that crafting a multi-pronged 

case-mix adjustment model, which 

includes adjustments based both on 

timing within a home health sequence 

as well as the source of the beneficiary 

admission, will serve to more accurately 

account for resources required for 

Medicare beneficiaries and similarly 

provide a differentiated payment 

amount for care. 

Several commenters responding to the 

CY 2018 HH PPS proposed rule 

expressed concern regarding the 

operational aspects of the timing 

element of the alternative case-mix 

adjustment methodology. As we 

described in the CY 2018 HH PPS 

proposed rule, and as we are proposing 

in this rule, we would use Medicare 

claims data and not the OASIS 

assessment in order to determine if a 30- 

day period is considered ‘‘early’’ or 

‘‘late’’ (82 FR 35309). We have 

developed claims processing procedures 

to reduce the amount of administrative 

burden associated with the 

implementation of the PDGM. Providers 

would not have to determine whether a 

30-day period is early (the first 30-day 

period) or later (all adjacent 30-day 

periods beyond the first 30-day period) 

if they choose not to. Information from 

Medicare systems would be used during 

claims processing to automatically 

assign the appropriate timing category. 


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To identify the first 30-day period 

within a sequence, the Medicare claims 

processing system would verify that the 

claim ‘‘From date’’ and ‘‘Admission 

date’’ match. If this condition were to be 

met, our systems would send the 

‘‘early’’ indicator to the HH Grouper for 

the 30-day period of care. When the 

claim was received by CMS’s Common 

Working File (CWF), the system would 

look back 60 days to ensure there was 

not a prior, related 30-day period. If not, 

the claim would continue to be paid as 

‘‘early.’’ If another related 30-day period 

were to be identified, that is an earlier 

30-day period in the sequence, the claim 

would be flagged as ‘‘late’’ and returned 

to the shared systems for subsequent 

regrouping and re-pricing. Those 

periods that are not the first 30-day 

period in a sequence of adjacent 

periods, separated by no more than a 60 

day gap, would be categorized as ‘‘late’’ 

periods and placed in corresponding 

PDGM categories. 

Early 30-day periods are defined as 

the initial 30-day period in a sequence 

of adjacent 30-day periods. Late 30-day 

periods are defined as all subsequent 

adjacent periods beyond the first 30-day 

period. Periods are considered to be 

adjacent if they are contiguous, meaning 

that they are separated by no more than 

a 60-day period between 30-day periods 

of care. In determining a gap, we only 

consider whether the beneficiary was 

receiving home health care from 

traditional fee-for-service Medicare. 

For example, if the beneficiary has not 

received home health care through 

traditional Medicare for at least 60 days, 

and then receives home health care from 

agency A, that is an early 30-day period. 

If that 30-day period receives a PEP 

adjustment and agency B recertifies the 

beneficiary for a second 30-day period, 

that second 30-day period is now 

considered a late 30-day period. 

However, the beneficiary could have 

received home health care from other 

traditional Medicare providers within 

60 days before coming to agency A. The 

designation of early or late would 

depend upon how many adjacent 

periods of care were received prior to 

coming to agency A. The CWF will 

examine claims upon receipt in 

comparison to all previously processed 

30-day period to verify that the period 

is correctly designated as early or later. 

The 60-day period to determine a gap 

that will begin a new sequence of 30- 

day periods will be counted in most 

instances from the calculated end date 

of the 30-day period. That is, in most 

cases CWF will count from ‘‘day 30’’ of 

a 30-day period without regard to an 

earlier discharge date. The exception to 

this is for 30-day periods that were 

subject to PEP adjustment. In PEP cases, 

CWF will count 60 days from the date 

of the last billable home health visit 

provided. Under the current HH PPS, 

the partial episode payment (PEP) 

adjustment is a proportion of the 

episode payment that is based on the 

span of days, including the start-of-care 

date or first billable service date, 

through and including the last billable 

service date under the original plan of 

care, before the intervening event in a 

home health beneficiary’s care, which is 

defined as: A beneficiary elected 

transfer, or a discharge and return to 

home health that would warrant, for 

purposes of payment, a new OASIS 

assessment, physician certification of 

eligibility, and a new plan of care. 

Because PEPs are paid based upon the 

last billable service date and not 

necessarily based on the last day of a 60- 

day episode, we would consider the end 

of the PEP HH episode as the last 

billable home health visit provided and 

begin the count of gap days from the 

date of the last billable home health 

visit and not ‘‘day 30’’ of a 30-day 

period. 

Regarding PEP adjustments, consider 

the following example: A 30-day period 

is opened on January 1, 2020 which 

would normally span until January 30, 

2020. If this 30-day period were not 

subject to a PEP adjustment, any 30-day 

period beginning within 60 days 

following January 30, 2020 would be 

considered an adjacent 30-day period. 

In the case of a PEP adjustment, the 

determination of an adjacent 30-day 

period would no longer be based on day 

60, but would instead be based on the 

latest billable visit in the 30-day period. 

Assume in the example, the patient is 

transferred to another HHA (triggering 

the PEP adjustment) on January 15, 2020 

but the last billable visit is provided on 

January 13, 2020. In this case, any 30- 

day period beginning within 60 days 

following the January 13, 2020 visit 

would be considered an adjacent 30-day 

period. 

Intervening stays in inpatient 

facilities will not create any special 

considerations in counting the 60-day 

gap. If an inpatient stay occurred within 

a period, it would not be a part of the 

gap, as counting would begin at ‘‘day 

60’’ which in this case would be later 

than the inpatient discharge date. If an 

inpatient stay occurred within the time 

after the end of the HH period and 

before the beginning of the next one, 

those days would be counted as part of 

the gap just as any other days would. 

If periods are received after a 

particular claim is paid that change the 

sequence initially assigned to the paid 

period (for example, by service dates 

falling earlier than those of the paid 

period, or by falling within a gap 

between paid periods), Medicare 

systems will initiate automatic 

adjustments to correct the payment of 

any necessary periods. 

Upon receipt of a HH period coded to 

represent the early 30-day period in a 

sequence, Medicare systems will search 

the period history records that are 

maintained for each beneficiary. If an 

existing 30-day period is found on that 

history, the claim for the new period 

will be recoded to represent its 

sequence correctly and paid according 

to the changed code. In addition, when 

any new 30-day period is added to those 

history records for each beneficiary, the 

coding representing period sequence on 

previously paid periods will be checked 

to see if the presence of the newly 

added period causes the need for 

changes to those periods. If the need for 

changes is found, Medicare systems will 

initiate automatic adjustments to those 

previously paid periods. 

For example, a given 30-day period is 

initially determined to be and paid as 

the early period in a sequence of 

periods. After some amount of time, a 

claim is submitted by another HHA that 

occurs before the previously designated 

first period in the sequence of adjacent 

periods and is less than 60 days before 

the beginning of that previously 

designated first period. In such a case, 

the 30-day period corresponding to the 

newly submitted claim becomes the first 

30-day period of this sequence of 

adjacent 30-day periods and thus is 

considered to be an early period. The 

30-day period previously designated as 

the first 30-day period in the sequence 

of periods now becomes the second 30- 

day period in the sequence of adjacent 

periods, thus changing its status from 

that of an early period to that of a late 

period. 

We plan to develop materials 

regarding timing categories, including 

such topics as claims adjustments and 

resolution of claims processing issues. 

We will also update guidance in the 

Medicare Claims Processing Manual, as 

well as the Medicare Benefit Manual as 

appropriate with detailed procedures. 

We will also work with our Medicare 

Administrative Contractors (MACs) to 

address any concerns regarding the 

processing of home health claims as 

well as develop training materials to 

facilitate all aspects of the transition the 

PDGM, including the unique aspects of 

the timing categories. 

Several commenters responding to the 

CY 2018 HH PPS proposed rule had 

concerns regarding the potential for 

problematic provider behavior due to 

financial incentives. We note that we 


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fully intend to monitor provider 

behavior in response to the new PDGM. 

As we receive and evaluate new data 

related to the provision of Medicare 

home health care under the PDGM, we 

will reassess the appropriateness of the 

payment levels for ‘‘early’’ and ‘‘late’’ 

periods in a sequence of periods. 

Additionally, we will share any 

concerning behavior or patterns with 

the Medicare Administrative Contracts 

(MACs) as well as our Center for 

Program Integrity. We plan to monitor 

for and identify any variations in the 

patterns of care provided to home health 

patients, including both increased and 

decreased provision of care to Medicare 

beneficiaries. We note that an increase 

in the volume of Medicare beneficiaries 

receiving home health care may, in fact, 

represent a positive outcome of the 

PDGM, signaling increased access to 

care for the Medicare population, so 

long as said increase in volume of 

beneficiaries is appropriate and in 

keeping with eligibility guidelines for 

the Medicare home health benefit. 

We invite public comments on the 

timing categories in the proposed PDGM 

and the associated regulations text 

changes outlined in section III.F.13. of 

this proposed rule. 

5. Admission Source Category 

In the CY 2018 HH PPS proposed 

rule, we described analysis showing the 

impact of the source of admission on 

home health resource use and proposed 

to classify periods into one of two 

admission source categories— 

community or institutional—depending 

on what healthcare setting was utilized 

in the 14 days prior to home health (82 

FR 35309). We proposed that a 30-day 

period would be categorized as 

institutional if an acute or post-acute 

care (PAC) stay occurred in the 14 days 

prior to the start of the 30-day period of 

care. We also proposed that a 30-day 

period would be categorized as 

community if there was no acute or PAC 

stay in the 14 days prior to the start of 

the 30-day period of care. We proposed 

to adopt this categorization by 

admission source with the 

implementation of alternative case-mix 

adjustment methodology refinements. 

The proposed admission source 

category was discussed in detail in the 

CY 2018 HH PPS proposed rule and we 

solicited public comments on the 

admission source component of the 

proposed alternative case-mix 

adjustment methodology. Several 

commenters expressed their support for 

the admission categories within the 

framework of the alternative case-mix 

adjustment methodology refinements, as 

they believe that these groups would be 

meaningful and would more 

appropriately align the cost of Medicare 

home health care with payments, 

thereby improving the accuracy of the 

HH payment system under the 

alternative case-mix adjustment 

methodology refinements. Commenters 

also expressed a variety of concerns 

regarding admission source, stating that 

the source of a home health admission 

may not always correspond with home 

health beneficiary needs and associated 

provider costs, that the categories would 

discourage the admission of community 

entrants due to lower reimbursement, 

that the differentiation may encourage 

HHAs to favor hospitalization during an 

episode of home health care, that 

agencies’ ability to provide the care for 

beneficiaries in the community would 

be reduced, and that small HHAs with 

no hospital affiliation would be 

negatively impacted. Several 

commenters recommended that CMS 

consider incorporating other clinical 

settings into the definition of the 

institutional category, including 

hospices and outpatient facilities. 

Several commenters also expressed 

concern regarding the operational 

aspects of the admission source 

category, requesting guidance for 

retroactive adjustments, plans for the 

claims readjustment process due to 

institutional claim issues, definitions for 

timely filing, and guidance regarding 

when occurrence codes may be utilized. 

Moreover, in accordance with the 

requirement of section 51001 of the BBA 

of 2018, a Technical Expert Panel (TEP) 

convened in February 2018 to solicit 

feedback and identify and prioritize 

recommendations from a wide variety of 

industry experts and patient 

representatives regarding the public 

comments received on the proposed 

alternative case-mix adjustment 

methodology. Comments on the 

admission source categories and 

suggestions for refinement to this 

element of the alternative case-mix 

system were very similar between those 

received in response to the CY 2018 HH 

PPS proposed rule and those provided 

by the TEP participants. 

We appreciate commenters’ feedback 

regarding the admission source element 

of the alternative case-mix adjustment 

methodology. The intention of the 

proposal included in the CY 2018 HH 

PPS proposed rule, including the 

admission source component, was to 

refine and to better fit costs incurred by 

agencies for patients with differing 

characteristics and needs under the HH 

prospective payment system, and we 

believe that the differing weights for 

source of admission will serve to 

promote appropriate alignment between 

costs and payment within the HH PPS. 

As described in the CY 2018 HH PPS 

proposed rule, our analytic findings 

demonstrate that institutional 

admissions have higher average 

resource use when compared with 

community admissions, which 

ultimately led to the inclusion of the 

admission source category within the 

framework of the alternative case-mix 

adjustment methodology refinements 

(82 FR 35309). The differences in care 

needs during home health based on 

admission source are illustrated in the 

resource utilization figures presented in 

Table 35, which shows the distribution 

of admission sources as well as average 

resource use for 30-day periods by 

admission source. 

TABLE 35—AVERAGE RESOURCE USE BY ADMISSION SOURCE (14 DAY LOOK-BACK; 30 DAY PERIODS) ADMISSION

SOURCE, COMMUNITY AND INSTITUTIONAL ONLY

Average 

resource 

use 

Frequency 

of periods 

Percent 

of periods 

Standard 

deviation of 

resource 

use 

25th 

percentile of 

resource 

use 

Median 

resource 

use 

75th 

percentile of 

resource 

use 

Community ................................................................................ $1,363.11 6,408,805 74.3 $1,119.20 $570.26 $1,062.05 $1,817.75 

Institutional ................................................................................ 2,171.00 2,215,971 25.7 1,303.24 1,246.05 1,920.06 2,791.91 

Total ................................................................................... 1,570.68 8,624,776 100.0 1,221.38 679.12 1,272.18 2,117.47 

Source: CY 2017 Medicare claims data for episodes ending on or before December 31, 2017 (as of March 2, 2018). 

Institutional admissions have 

significantly higher average resource use 

at $2,171.00 compared with community 

admissions at $1,363.11, a difference of 

$807.89. Median values of resource use 

also show a significant difference 


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32396 Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules 

35O’Connor, M. (2012, February). Hospitalization 

Among Medicare-Reimbursed Skilled Home Health 

Recipients. Retrieved March 02, 2017, from https:// 

www.ncbi.nlm.nih.gov/pmc/articles/PMC4690459. 

36Rosati, R. J., Huang, L., Navaie-Waliser, M., & 

Feldman, P. H. (2003). Risk Factors for Repeated 

Hospitalizations Among Home Healthcare 

Recipients. Journal For Healthcare Quality, 25(2), 

4–11. doi:10.1111/j.1945–1474.2003.tb01038.x. 

37Forster, A. J. (2003). The Incidence and 

Severity of Adverse Events Affecting Patients after 

Discharge from the Hospital. Annals of Internal 

Medicine, 138(3), 161. doi:10.7326/0003–4819– 

138–3–200302040–00007. 

38Meyers, A. G., Salanitro, A., Wallston, K. A., 

Cawthon, C., Vasilevskis, E. E., Goggins, K. M., . . . 

Kripalani, S. (2014). Determinants of health after 

hospital discharge: Rationale and design of the 

Vanderbilt Inpatient Cohort Study (VICS). BMC 

Health Services Research, 14(1). doi:10.1186/1472– 

6963–14–10. 

between sources of admission, with 

institutional resource use at $1,920.06 

while community resource use is at 

$1,062.05, a difference of $858.01. The 

pattern of higher resource use for 

institutional admissions as compared to 

community admissions remains 

consistent for the 25th and 75th 

percentiles, with a difference of 

approximately $675 and $974, 

respectively. 

Additionally, we note that we do not 

show preference to any particular 

patient profile, but rather aim to better 

align home health payment with the 

costs associated with providing care. As 

discussed in our CY 2018 HH PPS 

proposed rule, current research around 

those patients who are discharged from 

acute and PAC settings shows that these 

beneficiaries tend to be sicker upon 

admission, are being discharged rapidly 

back to the community, and are more 

likely to be re-hospitalized after 

discharge due to the acute nature of 

their illness.35 Additionally, as further 

described in the CY 2018 HH PPS 

proposed rule, research studies indicate 

that patients admitted to home health 

from institutional settings are 

vulnerable to adverse effects and injury 

because of the functional decline that 

occurs due to their institutional stay, 

indicating that the patient population 

referred from an institutional setting 

requires more concentrated resources 

and supports to account for and mitigate 

this functional decline.36 Moreover, as 

described in the CY 2018 HH PPS 

proposed rule, research suggests that the 

reduction in monitoring from the level 

typically experienced in an inpatient 

facility to that in the home environment 

can potentially cause gaps in care and 

consequently increased risk for adverse 

events for the newly-admitted home 

health beneficiary, and any negative 

impacts of the transition to the home 

setting can be reduced by an appropriate 

increase in care for the beneficiary, 

particularly through more frequent 

assessment of their condition and 

ongoing monitoring once transferred to 

the home environment.37 Furthermore, 

research discussed in our CY 2018 HH 

PPS proposed rule shows that 

beneficiaries discharged from 

institutional settings are more 

vulnerable because of, among other 

factors, the need to manage new health 

care issues, major modifications to 

medication interventions, and the 

coordination of follow-up 

appointments, which could lead to the 

risk for adverse drug events, for errors 

in a beneficiary’s medication regimen, 

and for the need to readmit to the 

hospital due to deterioration of the 

patient’s condition.38 Additionally, we 

note that the goal of the admission 

source variable is not to identify or 

evaluate for increases in rehospitalization in the home health 

beneficiary population but rather to 

align payment with the costs of 

providing home health care. Other CMS 

initiatives such as the HH QRP as well 

as the HH VBP demonstration take into 

account readmissions, among other 

measures of quality. However, because 

this population is at higher risk for 

possible readmission to an institutional 

setting, we believe that more intensive 

supports, partnered with differentiated 

payment weights, are appropriate in 

crafting a payment system that better 

reflects the costs incurred by HHAs 

while also promoting the delivery of 

quality care to the Medicare population. 

In summary, clinical research continues 

to indicate that the needs of the 

institutional population are intensive. 

Likewise, our analysis of home health 

data shows that costs sustained by home 

health agencies for those beneficiaries 

admitted from institutional settings are 

higher than community entrants. 

Therefore, we believe that accounting 

for these material differences in the care 

needs of the beneficiary population 

admitted from institutional settings and 

their resultant, differentiated resource 

use, will serve to better align payments 

with actual costs incurred by HHAs 

when caring for Medicare beneficiaries. 

We expect that HHAs will continue to 

provide the most appropriate care to 

Medicare home health beneficiaries, 

regardless of admission source or any 

other category related to home health 

payment. As we noted in the CY 2018 

HH PPS proposed rule, the primary goal 

of home health care is to provide 

restorative care when improvement is 

expected, maintain function and health 

status if improvement is not expected, 

slow the rate of functional decline to 

avoid institutionalization in an acute or 

post-acute care setting, and/or facilitate 

transition to end-of-life care as 

appropriate (82 FR 35348). The primary 

goal of the HH PPS is to align payment 

with the costs of providing home health 

care. Furthermore, in our CY 2000 HH 

PPS final rule, commenters asserted that 

patients admitted to home health from 

the hospital were often more acutely ill 

and resource-intensive than other 

patients, particularly when compared 

with beneficiaries who had no 

institutional care prior to admission (64 

FR 41147). We appreciate the concerns 

expressed in response to the CY 2018 

HH PPS proposed rule regarding 

possible behavioral changes by 

providers given the perceived incentives 

created by the admission source 

categories within the alternative casemix adjustment methodology. However, 

we continue to expect that HHAs will 

provide the appropriate care needed by 

all beneficiaries who are eligible for the 

home health benefit, including those 

beneficiaries with medically-complex 

conditions who are admitted from the 

community. We will carefully monitor 

the outcomes of the proposed change, 

including any impacts to community 

entrants, and make further refinements 

as necessary. 

Regarding the incorporation of other 

clinical settings into the definition of 

the institutional category under the 

alternative case-mix adjustment 

methodology that some commenters 

raised in response to the CY 2018 HH 

PPS proposed rule, such as emergency 

department (ED) use and observational 

stays, we propose to only include those 

stays that are considered institutional 

stays in other Medicare settings. For 

example, observational stays do not 

count towards the 3-day window for an 

admission to a SNF because they are not 

categorized as inpatient. Additionally, 

in our analysis of 2017 HH claims data, 

we identified those HH stays that, 

within the 14 days prior to admission to 

HH, had been preceded by ED visits or 

outpatient observational stays and 

isolated these stays from stays that 

would otherwise be grouped into the 

community admission source category. 

As demonstrated in Table 36, 30-day 

periods of care for beneficiaries with a 

preceding ED visit (which would 

otherwise be grouped into the 

community admission source category) 

do not show higher resource use when 

compared to those beneficiaries entering 

from acute or PAC settings, with an 

average resource use at $1,660.64 per 

home health period as compared to 

$2,171.00 for institutional admits. When 

compared with those patients admitted 

from the community, admissions from 


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the ED show somewhat higher resource 

use at $1,660.64 per home health period 

as compared to $1,337.73 for 

community admits. We note that the 

volume of patients with preceding ED 

visits is relatively low, at about 5.8 

percent of total home health periods. 

TABLE 36—AVERAGE RESOURCE USE BY ADMISSION SOURCE (14 DAY LOOK-BACK, 30 DAY PERIODS) ADMISSION

SOURCE: COMMUNITY, INSTITUTIONAL, AND EMERGENCY DEPARTMENT

Average 

resource 

use 

Number of 

30-day 

periods 

Percent of 

30-day 

periods 

Standard 

deviation of 

resource 

use 

25th 

percentile of 

resource 

use 

Median 

resource 

use 

75th 

percentile of 

resource 

use 

Community ................................................................................ $1,337.73 5,905,217 68.5 $1,108.57 $558.54 $1,035.34 $1,779.73 

Institutional ................................................................................ 2,171.00 2,215,971 25.7 1,303.24 1,246.05 1,920.06 2,791.91 

Emergency Department ............................................................ 1,660.64 503,588 5.8 1,197.60 782.63 1,396.50 2,225.38 

Total ................................................................................... 1,570.68 8,624,776 100.0 1,221.38 679.12 1,272.18 2,117.47 

Similarly, 30-day periods for 

beneficiaries with preceding 

observational stays (which would 

otherwise be grouped into the 

community admission source category) 

also do not show higher resource use 

when compared to those beneficiaries 

entering from acute or PAC settings, as 

described in Table 37, with average 

resource use at $1,820.06 per home 

health period as compared to $2,171.00 

for institutional admits. 

TABLE 37—AVERAGE RESOURCE USE BY ADMISSION SOURCE (14 DAY LOOK-BACK; 30 DAY PERIODS) ADMISSION

SOURCE: COMMUNITY, INSTITUTIONAL, AND OBSERVATIONAL STAYS

Average 

resource use 

Number of 

30-day 

periods 

Percent of 

30-day 

periods 

Standard 

deviation 

of resource use 

25th 

percentile 

of resource use 

Median 

resource use 

75th 

percentile 

of resource use 

Community ................................................................................ $1,350.90 6,242,043 72.4% $1,114.94 $564.31 $1,048.86 $1,799.27 

Institutional ................................................................................ 2,171.00 2,215,971 25.7% 1,303.24 1,246.05 1,920.06 2,791.91 

Observational Stays .................................................................. 1,820.06 166,762 1.9% 1,180.96 960.15 1,589.08 2,399.68 

Total ................................................................................... 1,570.68 8,624,776 100.0% 1,221.38 679.12 1,272.18 2,117.47 

When compared with those patients 

admitted from the community, 

admissions from observational stays 

show higher resource use at $1,820.06 

per home health period as compared to 

$1,350.90 for community admits. 

However, the volume of patients with 

preceding observational stays is very 

low, at about 2 percent of total home 

health periods. 

In summary, home health stays with 

preceding observational stays and ED 

visits show resource use that falls 

between that of the institutional and 

community categories. However, the 

resource use is not equivalent to that of 

the institutional settings; therefore, we 

do not believe it appropriate to include 

observational stays and ED visits in the 

institutional category for the purposes of 

the PDGM. Additionally, including 

these stays in the institutional category 

would lead to a small reduction in the 

overall average resource use and related 

case mix weights for groups admitted 

from acute and PAC settings. Moreover, 

including ED or observational stays with 

discharges from acute care hospitals, 

LTCHs, IRFs and SNFs would be 

inconsistent with section 1861(tt)(1) of 

the Act, which defines the term ‘‘postinstitutional home health services’’ as 

discharges from hospitals (which 

include IRFs and LTCHs) and SNFs 

within 14 days of when home health 

care is initiated. 

We explored the option of creating a 

third admission source category 

specifically for observational stays/ED 

visits. In order to more fully understand 

the potential impact of a third category, 

we analyzed the overall impact of the 

creation of such a category. For the 

purposes of this analysis, in the event 

that a home health stay was preceded by 

both an institutional stay and an 

observation stay or ED visit, the case 

would be grouped into the institutional 

category. Our findings indicate for those 

HH stays with a preceding outpatient 

observational stay/ED visit, the overall 

payment weight for associated groups 

for ‘‘early’’ 30-day periods (as defined in 

section III.F.4 of this rule) would be 

approximately 6 percent higher than the 

community admission counterparts, 

whereas institutional stays would see 

weights that are approximately 19 

percent higher than community 

admissions. When examining the 

overall payment weights for ‘‘late’’ 30- 

day periods (as defined in section III.F.4 

of this rule), HH stays with a preceding 

outpatient admission would observe 

weights that are approximately 10 

percent higher than the community 

admission counterparts, whereas 

institutional stays would see weights 

that are approximately 43 percent 

higher than community admissions. 

However, we are concerned that a third 

admission source category for 

observational stays and ED visits could 

create an incentive for providers to 

encourage outpatient encounters both 

prior to a 30-day period of care or 

within a 30-day period of care within 14 

days of the start of the next 30-day 

period, thereby potentially 

inappropriately increasing costs to the 

Medicare program overall. The clinical 

threshold for an observational stay or an 

ED visit is not as high as that required 

for an institutional admission, and we 

are concerned that home health agencies 

may encourage beneficiaries to engage 

with emergency departments before 

initiating a home health stay. 

For example, in the FY 2014 IPPS/ 

LTCH PPS final rule and also the 

Medicare Benefit Policy Manual Chapter 

1—Inpatient Hospital Services Covered 

Under Part A, CMS clarified and 

specified in the regulations that an 

individual becomes an inpatient of a 

hospital, including a long term care 

hospital or a Critical Access Hospital, 

when formally admitted as such 

pursuant to an order for inpatient 

admission by a physician or other 

qualified practitioner described in the 

final regulations (78 FR 50495). The 


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order is required for payment of hospital 

inpatient services under Medicare Part 

A. CMS also specified that for those 

hospital stays in which the physician 

expects the beneficiary to require care 

that crosses two midnights and admits 

the beneficiary based upon that 

expectation, Medicare Part A payment is 

generally appropriate. Additionally, for 

the purposes of admissions to skilled 

nursing facilities, the Medicare Benefit 

Policy Manual Chapter 8—Coverage of 

Extended Care (SNF) Services Under 

Hospital Insurance states that in order to 

qualify for post-hospital extended care 

services, the individual must have been 

an inpatient of a hospital for a medically 

necessary stay of at least three 

consecutive calendar days and that time 

spent in observation or in the 

emergency room prior to (or in lieu of) 

an inpatient admission to the hospital 

does not count toward the 3-day 

qualifying inpatient hospital stay, as a 

person who appears at a hospital’s 

emergency room seeking examination or 

treatment or is placed on observation 

has not been admitted to the hospital as 

an inpatient; instead, the person 

receives outpatient services. 

Furthermore, admission to an inpatient 

rehabilitation facility (IRF) requires that 

for IRF care to be considered reasonable 

and necessary, the documentation in the 

patient’s IRF medical record must 

demonstrate a reasonable expectation 

that the patient must require active and 

ongoing intervention of multiple 

therapy disciplines, at least one of 

which must be PT or OT; require an 

intensive rehabilitation therapy 

program, generally consisting of 3 hours 

of therapy per day at least 5 days per 

week; or in certain well-documented 

cases, at least 15 hours of intensive 

rehabilitation therapy within a 7- 

consecutive day period, beginning with 

the date of admission; reasonably be 

expected to actively participate in, and 

benefit significantly from the intensive 

rehabilitation therapy program; require 

physician supervision by a 

rehabilitation physician, with face-toface visits at least 3 days per week to 

assess the patient both medically and 

functionally and to modify the course of 

treatment as needed; and require an 

intensive and coordinated 

interdisciplinary team approach to the 

delivery of rehabilitative care, as 

described in detail in Medicare Benefit 

Policy Manual, Chapter 1—Inpatient 

Hospital Services Covered Under Part A 

110.2—Inpatient Rehabilitation Facility 

Medical Necessity Criteria. 

Conversely, CMS specified that for 

hospital stays in which the physician 

expects the patient to require care less 

than two midnights, payment under 

Medicare Part A is generally 

inappropriate. (However, we note that 

in the CY 2016 Outpatient Prospective 

Payment System final rule, CMS 

adopted a policy such that for stays for 

which the physician expects the patient 

to need less than two midnights of 

hospital care (and the procedure is not 

on the inpatient-only list or otherwise 

listed as a national exception), an 

inpatient admission may be payable 

under Medicare Part A on a case-by-case 

basis based on the judgment of the 

admitting physician (80 FR 70297).) 

Regarding emergency department 

visits by Medicare beneficiaries, 

services are generally covered by 

Medicare Part B in instances where a 

beneficiary experiences an injury, a 

sudden illness, or an illness that quickly 

worsens. In the case of observational 

stays, as described in the Medicare 

Claims Processing Manual, Chapter 12, 

observation care is a well-defined set of 

specific, clinically appropriate services, 

which include ongoing short term 

treatment, assessment, and reassessment 

before a decision can be made regarding 

whether patients will require further 

treatment as hospital inpatients or if 

they are able to be discharged from the 

hospital. As described in the Medicare 

Benefit Policy Manual, Chapter 6— 

Hospital Services Covered Under Part B 

20.6—Outpatient Observation Services, 

observation services are commonly 

ordered for patients who present to the 

emergency department and who then 

require a significant period of treatment 

or monitoring in order to make a 

decision concerning their admission or 

discharge. Moreover, the Medicare 

Claims Processing Manual in Chapter 

4—Part B Hospital, 290—Outpatient 

Observation Services states that 

observation services are covered by 

Medicare only when provided by the 

order of a physician or another 

individual authorized by state licensure 

law and hospital staff bylaws to admit 

patients to the hospital or to order 

outpatient tests. In the majority of cases, 

the decision whether to discharge a 

patient from the hospital following 

resolution of the reason for the 

observation care or to admit the patient 

as an inpatient can be made in less than 

48 hours, usually in less than 24 hours. 

In only rare and exceptional cases do 

reasonable and necessary outpatient 

observation services span more than 48 

hours. In summary, the clinical 

thresholds for coverage and payment for 

an admission to institutional settings are 

higher when compared with ED visits 

and observational stays. Finally, we 

note that the proportion of home health 

periods with admissions from ED visits 

and observational stays is low relative to 

community and institutional 

counterparts. Creating a third 

community admission source category 

for observational stays and ED visits 

would potentially introduce added 

complexity into the payment system for 

a small portion of home health stays, 

which could lead to the creation of 

payment groups that contain very few 

stays with very little difference in casemix weights across the landscape of 

groups. 

For all of these reasons, we believe 

that incorporating HH stays with 

preceding observational stays and ED 

visits into the community admission 

category is most appropriate at this 

time. However, we note that as we 

receive and evaluate new data related to 

the provision of Medicare home health 

care under the PDGM, we will continue 

to assess the appropriateness of the 

payment levels for admission source 

within a home health period and give 

consideration to any cost differentiation 

evidenced by the resources required by 

those home health patients with a 

preceding outpatient event. 

Regarding the operational aspects of 

the admission source category, as 

described in the CY 2018 HH PPS 

proposed rule, we have developed 

automated claims processing procedures 

with the goal of reducing the amount of 

administrative burden associated with 

the admission source category of the 

alternative case-mix adjustment 

methodology (82 FR 35309). For 

example, Medicare systems will 

automatically determine whether a 

beneficiary has been discharged from an 

institutional setting for which Medicare 

paid the claim, using information used 

during claims processing to 

systematically identify admission 

source and address this issue. When the 

Medicare claims processing system 

receives a Medicare home health claim, 

the systems will check for the presence 

of a Medicare acute or PAC claim for an 

institutional stay. If such an 

institutional claim is found, and the 

institutional stay occurred within 14 

days of the home health admission, our 

systems will trigger an automatic 

adjustment of the corresponding HH 

claim to the appropriate institutional 

category. Similarly, when the Medicare 

claims processing system receives a 

Medicare acute or PAC claim for an 

institutional stay, the systems will 

check for the presence of a subsequent 

HH claim with a community payment 

group. If such a HH claim is found, and 

the institutional stay occurred within 14 

days of the home health admission, our 

systems will trigger an automatic 


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adjustment of the HH claim to the 

appropriate institutional category. This 

process may occur any time within the 

12-month timely filing period for the 

acute or PAC claim. The OASIS 

assessment will not be utilized in 

evaluating for admission source 

information. 

Moreover, as we also proposed in the 

CY 2018 HH PPS proposed rule, we 

propose in this rule that newly-created 

occurrence codes would also be 

established, allowing HHAs to manually 

indicate on Medicare home health 

claims that an institutional admission 

had occurred prior to the processing of 

an acute or PAC Medicare claim, if any, 

in order to receive the higher payment 

associated with the institutional 

admission source sooner (82 FR 35312). 

However, the usage of the occurrence 

codes is limited to situations in which 

the HHA has information about the 

acute or PAC stay. We also noted that 

the use of these occurrence codes would 

not be limited to home health 

beneficiaries for whom the acute or PAC 

claims were paid by Medicare. HHAs 

would also use the occurrence codes for 

beneficiaries with acute or PAC stays 

paid by other payers, such as the 

Veterans Administration (VA). 

If a HHA does not include on the HH 

claim the occurrence code indicating 

that a home health patient had a 

previous institutional stay, processed 

either by Medicare or other institutions 

such as the VA, such an admission will 

be categorized as ‘‘community’’ and 

paid accordingly. However, if later a 

Medicare acute or PAC claim for an 

institutional stay occurring within 14 

days of the home health admission is 

submitted within the timely filing 

deadline and processed by the Medicare 

systems, the HH claim would be 

automatically adjusted and recategorized as an institutional 

admission and appropriate payment 

modifications would be made. If there 

was a non-Medicare institutional stay 

occurring within 14 days of the home 

health admission but the HHA was not 

aware of such a stay, upon learning of 

such a stay, the HHA would be able to 

resubmit the HH claim that included an 

occurrence code, subject to the timely 

filing deadline, and payment 

adjustments would be made 

accordingly. 

We note that the Medicare claims 

processing system will check for the 

presence of an acute or PAC Medicare 

claim for an institutional stay occurring 

within 14 days of the home health 

admission on an ongoing basis and 

automatically assign the home health 

claim as ‘‘community’’ or 

‘‘institutional’’ appropriately. As a 

result, with respect to a HH claim with 

a Medicare institutional stay occurring 

within 14 days of home health 

admission, we will not require the 

submission of an occurrence code in 

order to appropriately categorize the HH 

claim to the applicable admission 

source. With respect to a HH claim with 

a non-Medicare institutional stay 

occurring with 14 days of home health 

admission, a HHA would need to 

submit an occurrence code on the HH 

claim in order to have the HH claim 

categorized as ‘‘institutional’’ and paid 

the associated higher amount. 

Additionally, we plan to provide 

education and training regarding all 

aspects of the admission source process 

and to develop materials for guidance 

on claims adjustments, for resolution of 

claims processing issues, for defining 

timely filing windows, and for 

appropriate usage of occurrence codes 

through such resources as the Medicare 

Learning Network. We will also update 

guidance in the Medicare Claims 

Processing Manual as well as the 

Medicare Benefit Policy Manual as 

appropriate with detailed procedures. 

We will also work with our Medicare 

Administrative Contractors (MACs) to 

address any concerns regarding the 

processing of home health claims as 

well as develop training materials to 

facilitate all aspects of the transition to 

the PDGM, including the unique aspects 

of the admission source categories. 

With regards to the length of time for 

resubmission of home health claims that 

reflect a non-Medicare institutional 

claim, all appropriate Medicare rules 

regarding timely filing of claims will 

still apply. Procedures required for the 

resubmission of home health claims will 

apply uniformly for those claims that 

require editing due to the need to add 

or remove occurrence codes. Details 

regarding the timely filing guidelines for 

the Medicare program are available in 

the Medicare Claims Processing Manual, 

Chapter 1—General Billing 

Requirements, which is available at the 

following website: https://

www.cms.gov/Regulations-andGuidance/Guidance/Manuals/ 

downloads/clm104c01.pdf. 

Additionally, adjustments to any resubmitted home health claims will be 

processed in the same manner as other 

edited Medicare home health claims. 

Additionally, we plan to perform robust 

testing within the Medicare claims 

processing system to optimize and 

streamline the payment process. 

Regarding the process by which HHAs 

should verify a non-Medicare 

institutional stay, as we noted in in the 

CY 2018 HH PPS proposed rule, we 

expect home health agencies would 

utilize discharge summaries from all 

varieties of institutional providers (that 

is, Medicare and non-Medicare) to 

inform the usage of these occurrence 

codes, and these discharge documents 

should already be part of the 

beneficiary’s home health medical 

record used to support the certification 

of patient eligibility as outlined in 

§ 424.22(c) (82 FR 35309). Providers 

should utilize existing strategies and 

techniques for verification of such stays 

and incorporate relevant clinical 

information into the plan of care, as is 

already required by our Conditions of 

Participation. 

Our evaluation process within the 

Medicare claims processing system will 

check for the presence of an acute or 

PAC Medicare claim for an institutional 

stay occurring within 14 days of the 

home health admission on an ongoing 

basis. Under this approach, the 

Medicare systems would only evaluate 

for whether an acute or PAC Medicare 

claim for an institutional stay occurring 

within 14 days of the home health 

admission was processed by Medicare, 

not whether it was paid. Therefore, we 

do not expect that a home health claim 

will be denied due to unpaid Medicare 

claims for preceding acute or PAC 

admissions. Moreover, as previously 

stated above, we note that providers 

would have the option to submit the 

occurrence code indicating a preceding 

institutional stay in order to categorize 

the home health admission as 

‘‘institutional.’’ In the case of a HHA 

submitting an occurrence code because 

of a preceding Medicare institutional 

stay, if upon medical review after 

finding no Medicare acute or PAC 

claims in the National Claims History, 

and there is documentation of a 

Medicare acute or PAC stay within the 

14 days prior to the home health 

admission, but the institutional setting 

did not submit its claim in a timely 

fashion, or at all, we would permit the 

institutional categorization for the 

payment of the home health claim 

through appropriate administrative 

action. Similarly, in the case of a HHA 

submitting an occurrence code because 

of a preceding non-Medicare 

institutional stay, if documentation of a 

non-Medicare acute or PAC stay within 

the 14 days prior to the home health 

admission, is found, we would permit 

the categorization of the home health 

claim as ‘‘institutional’’. 

However, if upon medical review after 

finding no acute or PAC Medicare 

claims in the National Claims History, 

and there is no documentation of an 

acute or PAC stay, either a Medicare or 

non-Medicare stay, within 14 days of 

the home health admission, we would 


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39Report to Congress. Medicare Home Health 

Study: An Investigation on Access to Care and 

Payment for Vulnerable Patient Populations. 

Available at https://www.cms.gov/Medicare/ 

Medicare-Fee-for-Service-Payment/ 

HomeHealthPPS/Downloads/HH-Report-toCongress.pdf. 

40Report to the Congress: Medicare Payment 

Policy. (2015)Home health care services: Assessing 

payment adequacy and updating payments. Ch.9 

http://www.medpac.gov/docs/default-source/ 

reports/chapter-9-home-health-care-services-march2015-report-.pdf?sfvrsn=0. 

correct the overpayment. If upon 

medical review after finding no 

Medicare acute or PAC claims in the 

National Claims History and we find 

that an HHA is systematically including 

occurrence codes that indicate the 

patient’s admission source was 

‘‘institutional,’’ but no documentation 

exists in the medical record of Medicare 

or non-Medicare stays, we would refer 

the HHA to the zone program integrity 

contractor (ZPIC) for further review. 

Moreover, we intend to consider 

targeted approaches for medical review 

after the implementation of the 

admission source element of the PDGM, 

including potentially identifying HHAs 

that have claims that are consistently 

associated with acute or PAC denials, 

whose utilization pattern of acute or 

PAC occurrence codes is aberrant when 

compared with their peers, or other 

such metrics that would facilitate any 

targeted reviews. 

For all of the reasons described above, 

we are proposing to establish two 

admission source categories for 

grouping 30-day periods of care under 

the PDGM—institutional and 

community—as determined by the 

healthcare setting utilized in the 14 days 

prior to home health admission. We are 

proposing that 30-day periods for 

beneficiaries with any inpatient acute 

care hospitalizations, skilled nursing 

facility (SNF) stays, inpatient 

rehabilitation facility (IRF) stays, or long 

term care hospital (LTCH) stays within 

the 14 days prior to a home health 

admission would be designated as 

institutional admissions. We are 

proposing that the institutional 

admission source category would also 

include patients that had an acute care 

hospital stay during a previous 30-day 

period of care and within 14 days prior 

to the subsequent, contiguous 30-day 

period of care and for which the patient 

was not discharged from home health 

and readmitted (that is, the admission 

date and from date for the subsequent 

30-day period of care do not match) as 

we acknowledge that HHAs have 

discretion as to whether they discharge 

the patient due to a hospitalization and 

then readmit the patient after hospital 

discharge. However, we are proposing 

that we would not categorize PAC stays 

(SNF, IRF, LTCH stays) that occur 

during a previous 30-day period and 

within 14 days of a subsequent, 

contiguous 30-day period of care (that 

is, the admission date and from date for 

the subsequent 30-day period of care do 

not match) as institutional, as we would 

expect the HHA to discharge the patient 

if the patient required PAC in a different 

setting and then readmitted the patient, 

if necessary, after discharge from such 

setting. If the patient was discharged 

and then readmitted to home health, the 

admission date and ‘‘from’’ date on the 

30-day claim would match and the 

claims processing system will look for 

an acute or a PAC stay within 14 days 

of the home health admission date. This 

admission source designation process 

would be applicable to institutional 

stays paid by Medicare or any other 

payer. All other 30-day periods would 

be designated as community 

admissions. 

For the purposes of a RAP, we would 

only adjust the final home health claim 

submitted for source of admission. For 

example, if a RAP for a community 

admission was submitted and paid, and 

then an acute or PAC Medicare claim 

was submitted for that patient before the 

final home health claim was submitted, 

we would not adjust the RAP and would 

only adjust the final home health claim 

so that it reflected an institutional 

admission. Additionally, HHAs would 

only indicate admission source 

occurrence codes on the final claim and 

not on any RAPs submitted. 

We invite public comments on the 

admission source component of the 

proposed PDGM payment system. 

6. Clinical Groupings 

In the CY 2018 HH PPS proposed rule 

(82 FR 35307), we discussed the 

findings of the Home Health Study 

Report to Congress, which indicates that 

the current payment system may 

encourage HHAs to select certain types 

of patients over others.39 Patients with 

a higher severity of illness, including 

those receiving a greater level of skilled 

nursing care; for example, patients with 

wounds, with ostomies, or who are 

receiving total parenteral nutrition or 

mechanical ventilation were associated 

with higher resource use and lower 

margins. This may have produced a 

disincentive for providing care for 

patients with higher clinical acuity, and 

thereby may have limited access of 

home health services to these vulnerable 

patient populations.40 We noted that 

payment should be predicated on 

resource use and proposed that 

adjusting payment based on identified 

clinical characteristics and associated 

services would better align payment 

with resource use. 

For these reasons, we propose 

grouping 30-day periods of care into six 

clinical groups: Musculoskeletal 

Rehabilitation, Neuro/Stroke 

Rehabilitation, Wounds—Post-Op 

Wound Aftercare and Skin/NonSurgical Wound Care, Behavioral Health 

Care (including Substance Use 

Disorder), Complex Nursing 

Interventions, Medication Management, 

Teaching and Assessment (MMTA). 

These clinical groups are designed to 

capture the most common types of care 

that HHAs provide. We propose 

placement of each 30-day period of care 

into a specific clinical group based on 

the primary reason the patient is 

receiving home health care as 

determined by the principal diagnosis 

reported on the claim. Although the 

principal diagnosis code is the basis for 

the clinical grouping, secondary 

diagnosis codes and patient 

characteristics would then be used to 

case-mix adjust the period further 

through the comorbidity adjustment and 

functional level. A complete list of ICD– 

10–CM codes and their assigned clinical 

groupings is posted on the CMS HHA 

Center web page (https://www.cms.gov/ 

center/provider-Type/home-HealthAgency-HHA-Center.html). More 

information on the analysis and 

development of the groupings can be 

found in the CY 2018 HH PPS proposed 

rule as well as the HHGM technical 

report from December 2016, also 

available on the HHA Center webpage. 

In the CY 2018 HH PPS proposed 

rule, we solicited comments on the 

clinical groups and the assigned clinical 

groupings of the ICD–10–CM codes. 

Additionally, in February 2018, a 

Technical Expert Panel (TEP) was held 

in order to gain insight from industry 

leaders, clinicians, patient 

representatives, and researchers with 

experience in home health care and/or 

experience in home health agency 

management. Many commenters and 

TEP members supported the patientcentered approach to grouping patients 

by clinical characteristics, and several 

commenters felt that the clinical 

groupings did capture the majority of 

characteristics of the home health 

population. Specifically, commenters 

generally approved of the higherweighted complex nursing and wound 

groups, and agreed with the 

‘‘importance the HHGM places on these 

complex patients through its proposed 

payment rate.’’ One commenter stated 

that ‘‘the most complex and costly 

beneficiaries for a HHA are those that 

require intensive nursing care, while 


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those that require intensive therapy 

produce a significant margin with less 

cost.’’ Additional comments on the 

clinical groups generally included the 

following: Concern that some diagnosis 

codes are not used to group claims into 

the six clinical groups; concern about 

reduced therapy use in the clinical 

groups that aren’t specifically for 

musculoskeletal or neurological 

rehabilitation; concern that the groups 

do not capture clinically complex 

patients that require multiple home 

health disciplines; suggestions that the 

clinical groups should be based on 

impairments rather than diagnoses; and 

concern that the MMTA clinical group 

encompasses too many diagnosis codes. 

Several commenters expressed concern 

that certain ICD 10–CM diagnosis codes 

were not used for payment (for example, 

codes that were not used to group 

claims into the six clinical groupings), 

which could possibly restrict access to 

the benefit or force beneficiaries to seek 

care in institutional settings. Others had 

concerns regarding specific diagnosis 

codes they felt should be reassigned to 

different clinical groups. 

As outlined in the HHGM technical 

report from December 2016 and in the 

CY 2018 HH PPS proposed rule (82 FR 

35314), there were several reasons why 

a diagnosis code was not assigned to 

one of the six clinical groups. These 

included if the diagnosis code was too 

vague, meaning the code does not 

provide adequate information to support 

the need for skilled home health 

services (for example H57.9, 

Unspecified disorder of eye and 

adnexa); the code, based on ICD 10–CM, 

American Hospital Association (AHA) 

Coding Clinic, or Medicare Code Edits 

(MCE) would indicate a non-home 

health service (for example, dental 

codes); the code is a manifestation code 

subject to a manifestation/etiology 

convention, meaning that the etiology 

code must be reported as the principal 

diagnosis, or the code is subject to a 

code first sequencing convention (for 

example, G99.2 myelopathy in diseases 

classified elsewhere); the code identifies 

a condition which would be unlikely to 

require home health services (for 

example, L81.2, Freckles); the code is 

restricted to the acute care setting per 

ICD 10–CM/AHA Coding Clinic, or the 

diagnosis indicates death as the 

outcome (for example S06.1X7A, 

Traumatic cerebral edema with loss of 

consciousness of any duration with 

death due to brain injury prior to 

regaining consciousness). We did, 

however, review and re-group certain 

codes based on commenter feedback. 

For example, with regard to the 

classification of N39.0, Urinary tract 

infection, site not specified as an invalid 

code to group the home health period of 

care, we do agree that absent definitive 

information provided by the referring 

physician, a home health clinician 

would not know the exact site of a 

urinary tract infection (UTI). As such, 

Urinary tract infection, site not specified 

(N39.0) will be grouped under MMTA, 

as the home health services required 

would most likely involve teaching 

about the treatment for the UTI, as well 

as evaluating the effectiveness of the 

medication regimen. We encourage 

HHAs to review the list of diagnosis 

codes in the PDGM Grouping Tool 

posted on the HHA Center web page at: 

https://www.cms.gov/center/providerType/home-Health-Agency-HHACenter.html. Additionally, the ICD–10– 

CM code set exceeds the ICD–9–CM in 

the number of diagnoses and conditions 

and contains codes that are much more 

granular. Therefore, we disagree that 

excluding certain codes from payment 

will restrict access, considering the 

increase in diagnoses potentially 

requiring home health. 

With regard to commenter concern 

that the HHGM clinical groups did not 

account for the need for therapy in 

home health periods that are not 

specifically grouped into 

musculoskeletal or neurological 

rehabilitation, we continue to expect the 

ordering physician, in conjunction with 

the therapist to develop and follow a 

plan of care for any home health patient, 

regardless of clinical group, as outlined 

in the skilled service requirements at 

§ 409.44, when therapy is deemed 

reasonable and necessary. Although the 

principal diagnosis is a contributing 

factor in the PDGM and determines the 

clinical group, it is not the only 

consideration in determining what 

home health services are needed in a 

patient’s plan of care. It is the 

responsibility of the patient’s treating 

physician to determine if and what type 

of therapy the patient needs regardless 

of clinical grouping. In accordance with 

§ 409.44(c)(1)(i), the therapy goals must 

be established by a qualified therapist in 

conjunction with the physician when 

determining the plan of care. As such, 

therapy may likely be included in the 

plan of care for a patient in any of the 

six clinical groupings. Any therapy 

indicated in the plan of care is expected 

to meet the requirements outlined in 

§ 409.44, which states that all therapy 

services must relate directly and 

specifically to a treatment regimen 

(established by the physician, after any 

needed consultation with the qualified 

therapist). Additional requirements 

dictate that the amount, frequency, and 

duration of the services must be 

reasonable and necessary, as determined 

by a qualified therapist and/or 

physician, using accepted standards of 

clinical practice. One goal in developing 

the PDGM is to provide an appropriate 

payment based on the identified 

resource use of different patient groups, 

not to encourage, discourage, value, or 

devalue one type of skilled care over 

another. 

Likewise, for patients requiring two or 

three home health disciplines, the 

PDGM takes into account the functional 

level and comorbidities of the patient 

after the primary reason for the period 

is captured by the clinical grouping. 

Decreasing functional status, as 

indicated by a specific set of OASIS 

items, and the presence of certain 

comorbid conditions, is associated with 

increased resource use. Here is where, 

when combined with the clinical 

grouping, any multi-disciplinary 

therapy patients would be captured. For 

instance, a patient grouped into the 

Neuro-Rehabilitation clinical grouping 

with a high Functional Level (meaning 

high functional impairment) indicates 

increased therapy needs, potentially 

utilizing all skilled therapy disciplines. 

Additionally, the comorbidity 

adjustment further case mixes the 

period and increases payment to capture 

the additional resource use for a patient 

regardless of whether the services are 

skilled nursing or therapy based. 

Therefore, a patient with complex 

needs, including multiple therapy 

disciplines and medical management, is 

captured by the combination of the 

different levels of the PDGM. 

Furthermore, the current case-mix 

adjustment methodology does not 

differentiate between utilization of 

therapy disciplines and whether or not 

all three are utilized for the same 

patient. We have determined that the 

PDGM’s functional level when 

combined with the clinical grouping 

and comorbidity adjustment actually 

provides a much clearer picture of the 

patient’s needs, particularly in relation 

to therapy services. 

Comments on the CY 2018 HH PPS 

proposed rule and at the 2018 TEP 

indicated that diagnosis does not always 

correlate with need and that 

impairments and functional limitations 

are better predictors of therapy services. 

Additionally, some commenters stated 

that clinicians are more likely to focus 

on impairments and functional 

limitations when conceptualizing 

overall patient care, and suggested using 

them as the basis for the clinical groups 

rather than diagnosis codes. We do 

agree that diagnosis alone does not 


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20https://www.cms.gov/center/provider-Type/ 

home-Health-Agency-HHA-Center.html. 

provide the entire clinical picture of the 

home health patient; however, in the 

same way the clinical group is one 

aspect of the PDGM, therapy services 

are only one aspect of home health. In 

fact, the multidisciplinary nature of the 

benefit is precisely the reason that 

diagnosis should be an important aspect 

of the clinical groupings model. The 

various home health disciplines have 

different but overlapping roles in 

treating the patient; however, a 

diagnosis is used across disciplines and 

has important implications for patient 

care. A patient’s diagnosis consists of a 

known set of signs and symptoms 

agreed upon by the medical community. 

Each different healthcare discipline uses 

these identifiable signs and symptoms 

to apply its own approach and skill set 

to treat the patient. However, it remains 

a patient centered approach. 

Several commenters and TEP 

participants alike, stated that the MMTA 

clinical group is too broad and should 

be divided into more clinical groups or 

subgroups. One commenter questioned 

whether it made sense to assign patients 

to different clinical groupings if roughly 

60 percent of 30-day periods will fall 

into the MMTA category. Others 

considered it an ‘‘other’’ category that 

was counter to the goal of clarifying the 

need for home health. 

A significant goal of the PDGM is to 

clearly define what types of services are 

provided in home health and accurately 

ascribe payment to resource use. Our 

analysis showed that there are four very 

broad categories of interventions 

frequently provided in the home that are 

not attributable to one specific 

intervention or diagnosis: Health 

teaching; guidance and counseling; case 

management; treatments and 

procedures; and surveillance. These 

categories cross the spectrum of 

diagnoses, medications, and 

interventions, which understandably is 

why this clinical grouping represents 

the majority of home health episodes. 

We believe that these four broad 

categories of interventions in MMTA 

cannot be underestimated in 

importance. We stated in the CY 2018 

HH PPS proposed rule that many home 

health patients have multi-morbidity 

and polypharmacy, making education 

and surveillance crucial in the 

management of the home health patient 

in order to prevent medication errors 

and adverse effects. However, the 

principal diagnosis necessitating home 

care for these patients may not involve 

a complex nursing intervention, 

behavioral health, rehabilitation, or 

wound care. This group represents a 

broader, but no less important reason for 

home care. We believe MMTA is not so 

much an ‘‘other’’ category as much as it 

appears to represent the foundation of 

home health. Many commenters 

highlighted the complexity of home 

health patients; pointing to multimorbidity, ‘‘quicker and sicker’’ 

discharges, and polypharmacy as 

important factors in maintaining home 

health access. CMS agrees that these 

issues alone are important reasons for 

ordering home health services and 

necessitate their own clinical grouping. 

When initially developing the model, 

we looked at breaking MMTA into 

subgroups in order to account for 

differences amongst diagnoses within 

the broader category of this group. We 

found that the variation in resource use 

was similar across those subgroups and 

determined separating diagnoses further 

would only serve to make the model 

more complex and without significant 

variations in case-mix. However, in 

response to public comments and the 

discussion at the 2018 TEP,20 we 

performed further analysis on the 

division of MMTA into subgroups in 

order to estimate the payment regression 

if these groups were separated from 

MMTA. We conducted a thorough 

review of all the diagnosis codes 

grouped into MMTA. We then grouped 

the codes into subgroups based on 

feedback from public comments, which 

mainly focused on cardiac, oncology, 

infectious, and respiratory diagnoses. 

We created the additional subgroups 

(Surgical/Procedural Aftercare, Cardiac/ 

Circulatory, Endocrine, GI/GU, 

Infectious Diseases/Neoplasms, 

Respiratory, and Other) based on data 

that showed above-average resource use 

for the codes in those groups, and then 

combined certain groups that had a 

minimal number of codes. Those results 

are shown in Table 38. 

TABLE 38—DISTRIBUTION OF RESOURCE USE BY 30-DAY PERIODS

[MMTA subgroups] 

Subgroup N Mean Median 

Aftercare ...................................................................................................................................... 304,871 $1,605.43 $1,326.03 

Cardiac/Circulatory ...................................................................................................................... 1,594,149 1,433.02 1,121.27 

Endocrine ..................................................................................................................................... 425,077 1,524.45 1,062.41 

GI/GU ........................................................................................................................................... 402,322 1,414.44 1,115.29 

Infectious Diseases/Neoplasms/Blood-forming Diseases ........................................................... 347,755 1,400.65 1,077.58 

Respiratory ................................................................................................................................... 724,722 1,411.61 1,122.23 

Other ............................................................................................................................................ 1,226,750 1,366.56 1,035.76 

Total ...................................................................................................................................... 5,025,646 1,428.17 1,105.20 

Table 39 shows the impact each 

MMTA variable has on case-mix weight. 

The impact is calculated by taking the 

regression coefficient for each variable 

(unreported here) and dividing by the 

average resource use of the 30-day 

periods in the model. Model 1 shows 

the result when MMTA clinical group is 

not separated into subgroups. Model 1 

shows that all else equal, being in 

MMTA—Low Functional impairment 

causes no increase in case-mix weight 

(for example, a 30-day period’s case-mix 

weight would be calculated with the 

coefficients from the constant of the 

model plus the admission source/timing 

of the period plus the comorbidity 

adjustment). A 30-day period in 

MMTA—Medium Functional would 

increase the case-mix weight by 0.1560. 

A 30-day period in MMTA—High 

Functional would increase the case-mix 

weight by 0.2731. Model 2 shows the 

same information but now includes the 

MMTA subgroups. In any given 

functional level, many of the MMTA 

subgroups have an impact on the casemix weight that is similar to what is 

found in Model 1. For example, a period 

in MMTA (Other)—Medium Functional 


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has an increase in case-mix of 0.1568 

(which is very similar to the 0.1560 

value found in Model 1). There are some 

groups like Aftercare, Endocrine, and 

GI/GU which show different impacts 

than Model 1. Also, to a lesser extent 

these differences also exist for the 

‘‘Infectious Diseases/Neoplasms/Blood 

forming Diseases’’ and ‘‘Respiratory’’ 

subgroups. Some of these differences are 

driven by periods which are paid using 

an outlier adjustment. Model 3 removes 

outliers and the corresponding results 

for the Endocrine subgroup are very 

similar to Model 1. Some differences 

(for example in Aftercare) persist; 

however, the change in case-mix weight 

remains similar to Model 1. 

TABLE 39—CHANGE IN CASE-MIX WEIGHT ASSOCIATED WITH MMTA VARIABLES

Model 1 Model 2 Model 3 

(outliers 

excluded) 

Change in 

case-mix 

weight 

Change in 

case-mix 

weight 

Change in 

case-mix 

weight 

Variable 

MMTA—Low Functional ....................................................................................................... 0.000 ........................ ........................

MMTA—Medium Functional ................................................................................................. 0.1560 ........................ ........................

MMTA—High Functional ...................................................................................................... 0.2731 ........................ ........................

MMTA (Other)—Low Functional ........................................................................................... ........................ 0.000 0.000 

MMTA (Other)—Medium Functional .................................................................................... ........................ 0.1568 0.1523 

MMTA (Other)—High Functional .......................................................................................... ........................ 0.2896 0.2748 

MMTA (Aftercare)—Low Functional ..................................................................................... ........................ ¥0.1082 ¥0.1196 

MMTA (Aftercare)—Medium Functional ............................................................................... ........................ 0.0798 0.0701 

MMTA (Aftercare)—High Functional .................................................................................... ........................ 0.2588 0.2491 

MMTA (Cardiac/Circulatory)—Low Functional ..................................................................... ........................ ¥0.0239 ¥0.0050 

MMTA (Cardiac/Circulatory)—Medium Functional ............................................................... ........................ 0.1371 0.1652 

MMTA (Cardiac/Circulatory)—High Functional .................................................................... ........................ 0.2737 0.2952 

MMTA (Endocrine)—Low Functional ................................................................................... ........................ 0.1105 0.0282 

MMTA (Endocrine)—Medium Functional ............................................................................. ........................ 0.2859 0.1833 

MMTA (Endocrine)—High Functional ................................................................................... ........................ 0.4071 0.3086 

MMTA (GI/GU)—Low Functional ......................................................................................... ........................ ¥0.0751 ¥0.0639 

MMTA (GI/GU)—Medium Functional ................................................................................... ........................ 0.0997 0.1256 

MMTA (GI/GU)—High Functional ......................................................................................... ........................ 0.1992 0.2231 

MMTA (Infectious Diseases/Neoplasms/Blood forming Diseases)—Low Functional .......... ........................ ¥0.0452 ¥0.0472 

MMTA (Infectious Diseases/Neoplasms/Blood forming Diseases)—Medium Functional .... ........................ 0.1068 0.1128 

MMTA (Infectious Diseases/Neoplasms/Blood forming Diseases)—High Functional ......... ........................ 0.2281 0.2379 

MMTA (Respiratory)—Low Functional ................................................................................. ........................ ¥0.0501 ¥0.0488 

MMTA (Respiratory)—Medium Functional ........................................................................... ........................ 0.1027 0.1163 

MMTA (Respiratory)—High Functional ................................................................................ ........................ 0.2241 0.2400 

The results show that the change in 

case-mix weight was minimal for the 30- 

day periods assigned to these subgroups 

compared to the case-mix weights 

without the subgroups. Additionally, 

the impact of other variables in the 

model (admission source/timing, 

comorbidity adjustment) on the final 

case-mix weights were similar whether 

or not MMTA subgroups were used. 

Overall, using the MMTA subgroup 

model would result in more payment 

groups but not dramatic differences in 

case-mix weights across those groups. 

For this reason, we are not proposing to 

divide the MMTA clinical group into 

subgroups and to leave them as is 

shown in Table 40. However, we are 

soliciting comments from the public on 

whether there may be other compelling 

reasons why MMTA should be broken 

out into subgroups as shown in Table 

38, even if the additional subgroups do 

not result in significant differences in 

case-mix weights across those 

subgroups. We note that we also plan 

continue to examine trends in reporting 

and resource utilization to determine if 

future changes to the clinical groupings 

are needed after implementation of the 

PDGM. 

TABLE 40—PROPOSED CLINICAL GROUPS USED IN THE PDGM 

Clinical groups The primary reason for the home health encounter is to provide: 

Musculoskeletal Rehabilitation ............................ Therapy (physical, occupational or speech) for a musculoskeletal condition. 

Neuro/Stroke Rehabilitation ................................ Therapy (physical, occupational or speech) for a neurological condition or stroke. 

Wounds—Post-Op Wound Aftercare and Skin/ 

Non-Surgical Wound Care.

Assessment, treatment & evaluation of a surgical wound(s); assessment, treatment & evaluation of non-surgical wounds, ulcers, burns, and other lesions. 

Behavioral Health Care ....................................... Assessment, treatment & evaluation of psychiatric conditions, including substance use disorders. 

Complex Nursing Interventions ........................... Assessment, treatment & evaluation of complex medical & surgical conditions including IV, 

TPN, enteral nutrition, ventilator, and ostomies. 

Medication Management, Teaching and Assessment (MMTA).Assessment, evaluation, teaching, and medication management for a variety of medical and 

surgical conditions not classified in one of the above listed groups. 


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42Burke, R. MD, MS, Whitfield, E. Ph.D., Hittle, 

D. Ph.D., Min, S. Ph.D., Levy, C. MD, Ph.D., 

Prochazka, A. MD, MS, Coleman, E. MD, MPH, 

Schwartz, R. MD, Ginde, A. (2016). ‘‘Hospital 

Readmission From Post-Acute Care Facilities: Risk 

Factors, Timing, and Outcomes’’. The Journal of 

Post-Acute Care and Long Term Care Medicine. 

(17), 249–255. 

43Clauser, S. Ph.D., and Arlene S. Bierman, M.D., 

M.S. (2003). ‘‘Significance of Functional Status Data 

for Payment and Quality’’. Health Care Financing 

Review. 24(3), 1–12. 

44https://downloads.cms.gov/files/

hhgm%20technical%20report%20120516

%20sxf.pdf. 

45Exclusions of the OASIS C–1 Item M1033 

include, response #8: ‘‘currently reports 

exhaustion’’; response #9: ‘‘other risk(s) not listed 

in 1–8; response #10: None of the above. 

46 ‘‘Medicare Home Health Prospective Payment 

System: Case-Mix Methodology Refinements 

Overview of the Home Health Groupings Model’’ 

located at https://downloads.cms.gov/files/

hhgm%20technical%20report%20

120516%20sxf.pdf. 

7. Functional Levels and Corresponding 

OASIS Items 

As part of the overall payment 

adjustment under an alternative casemix adjustment methodology, in the CY 

2018 Home Health Prospective Payment 

System proposed rule (82 FR 35317), we 

proposed including a functional level 

adjustment to account for the resource 

costs associated with providing home 

health care to those patients with 

functional impairments. Research has 

shown a relationship exists between 

functional status, rates of hospital 

readmission, and the overall costs of 

health care services.42 Functional status 

is defined in a number of ways, but 

generally, functional status reflects an 

individual’s ability to carry out 

activities of daily living (ADLs) and to 

participate in various life situations and 

in society.43 CMS currently requires the 

collection of data on functional status in 

home health through a standardized 

assessment instrument: The Outcome 

and Assessment Information Set 

(OASIS). Under the current HH PPS, a 

functional status score is derived from 

the responses to those items and this 

score contributes to the overall case-mix 

adjustment for a home health episode 

payment. 

Including functional status in the 

case-mix adjustment methodology 

allows for higher payment for those 

patients with higher service needs. As 

functional status is commonly used for 

risk adjustment in various payment 

systems, including in the current HH 

PPS, we proposed that the alternative 

case-mix adjustment methodology 

would also adjust payments based on 

responses to selected functional OASIS 

items that have demonstrated higher 

resource use. Therefore, we examined 

every OASIS item for potential 

inclusion in the alternative case-mix 

adjustment methodology including 

those items associated with functional 

status. 

Generally, worsening functional 

status is associated with higher resource 

use, indicating that the responses to 

functional OASIS items may be useful 

as adjustors to construct case-mix 

weights for an alternative case-mix 

adjustment methodology. However, due 

to the lack of variation in resource use 

across certain responses and because 

certain responses were infrequently 

chosen, we combined some responses 

into larger response categories to better 

capture the relationship between 

worsening functional status and 

resource use. The resulting 

combinations of responses for these 

OASIS items are found at Exhibit 7–2 in 

the HHGM technical report, ‘‘Overview 

of the Home Health Groupings Model,’’ 

on the HHA Center web page.44

Each OASIS item included in the final 

model has a positive relationship with 

resource use, meaning as functional 

status declines (as measured by a higher 

response category), periods have more 

resource use, on average. As such, in the 

CY 2018 HH PPS proposed rule, we 

proposed that the following OASIS 

items would be included as part of the 

functional level adjustment under an 

alternative case-mix adjustment 

methodology: 

• M1800: Grooming. 

• M1810: Current Ability to Dress 

Upper Body. 

• M1820: Current Ability to Dress 

Lower Body. 

• M1830: Bathing. 

• M1840: Toilet Transferring. 

• M1850: Transferring. 

• M1860: Ambulation/Locomotion. 

• M1033 Risk of Hospitalization (at 

least four responses checked, excluding 

responses #8, #9, and #10).45

In the CY 2018 HH PPS proposed 

rule, we discussed how under the 

HHGM a home health period of care 

receives points based on each of the 

responses associated with the proposed 

functional OASIS items which are then 

converted into a table of points 

corresponding to increased resource 

use. That is, the higher the points, the 

higher the functional impairment. The 

sum of all of these points’ results in a 

functional impairment score which is 

used to group home health periods into 

a functional level with similar resource 

use. We proposed three functional 

impairment levels of low, medium, and 

high with approximately one third of 

home health periods from each of the 

clinical groups within each level. This 

means home health periods in the low 

impairment level have responses for the 

proposed functional OASIS items that 

are associated with the lowest resource 

use on average. Home health periods in 

the high impairment level have 

responses for the proposed functional 

OASIS items that are associated with 

the highest resource use on average. We 

also proposed that the functional 

impairment level thresholds would vary 

between the clinical groups to account 

for the patient characteristics within 

each clinical group associated with 

increased resource costs affected by 

functional impairment. We provided a 

detailed analysis of the development of 

the functional points and the functional 

impairment level thresholds by clinical 

group in the HHGM technical report 46

and in Tables 36 and 37 in the CY 2018 

HH PPS proposed rule (82 FR 35321). 

In the CY 2018 HH PPS proposed 

rule, we solicited comments on the 

proposed functional OASIS items, the 

associated points, and the thresholds by 

clinical group used to group patients 

into three functional impairment levels 

under the HHGM, as outlined above. 

The majority of comments received 

were from physical therapists, physical 

therapy assistants, occupational 

therapists, and national physical, 

occupational, and speech-language 

pathology associations. Likewise, a 

Technical Expert Panel (TEP) was 

convened in February 2018 to collect 

perspectives, feedback, and identify and 

prioritize recommendations from a wide 

variety of industry experts and patient 

representatives regarding the public 

comments received on the proposed 

HHGM. Comments were very similar 

between those received on the CY 2018 

HH PPS proposed rule and those made 

by the TEP participants. 

Most commenters agreed that the 

level of functional impairment should 

be included as part of the overall casemix adjustment in a revised case-mix 

model. Likewise, commenters were 

generally supportive of the OASIS items 

selected to be used in the functional 

level payment adjustment. Commenters 

noted that the role of patient 

characteristics and functional status as 

an indicator of resource use is a wellestablished principle in rehabilitation 

care. Some commenters stated that 

adopting a similar component in the 

home health payment system will help 

to remove the incentive to provide 

unnecessary therapy services to reach 

higher classifications for payment but 

will also move the HH PPS toward 

greater consistency with other postacute care prospective payment systems. 

Other comments received on the 

functional impairment level adjustment 


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47https://downloads.cms.gov/files/hhgm%20

technical%20report%20120516%20sxf.pdf. 

encompassed several common themes: 

The effect of the IMPACT Act 

provisions on the HHGM; adequacy of 

the functional impairment thresholds 

and corresponding payment 

adjustments; potential HHA behavioral 

changes to the provision of home health 

services; the impact of the removal of 

therapy thresholds on HHAs; and 

recommendations for the inclusion of 

other OASIS items into the functional 

impairment level adjustment. 

We note that the analysis presented in 

the CY 2018 HH PPS proposed rule was 

based on CY 2016 home health episodes 

using version OASIS–C1/ICD–10 data 

set, which did not include the 

aforementioned IMPACT Act functional 

items. To accommodate new data being 

collected for the Home Health Quality 

Reporting Program in support of the 

IMPACT Act, CMS has proposed to add 

the functional items, Section GG, 

‘‘Functional Abilities and Goals’’, to the 

OASIS data set effective January 1, 

2019. Because these GG functional items 

are not required to be collected on the 

OASIS until January 1, 2019, we do not 

have the data to determine the effect, if 

any, of these newly added items on 

resource costs during a home health 

period of care. However, if the 

alternative case-mix adjustment 

methodology, is implemented in CY 

2020, we would continue to examine 

the effects of all OASIS items, including 

the ‘‘GG’’ functional items, on resource 

use to determine if any refinements are 

warranted. 

Addressing those comments regarding 

the use and adequacy of the functional 

impairment thresholds to adjust 

payment, we remind commenters that 

the structure of categorizing functional 

impairment into Low, Medium, and 

High levels has been part of the home 

health payment structure since the 

implementation of the HH PPS. The 

current HH PPS groups’ scores are based 

on functional OASIS items with similar 

average resource use within the same 

functional level, with approximately a 

third of episodes classified as low 

functional score, a third of episodes are 

classified as medium functional score, 

and a third of episodes are classified as 

high functional score. Likewise, the 

PDGM groups’ scores would be based on 

functional OASIS items with similar 

resource use and would have three 

levels of functional impairment severity: 

Low, medium and high. However, the 

three functional impairment thresholds 

vary between the clinical groups to 

account for the patient characteristics 

within that clinical group associated 

with increased resource costs affected 

by functional impairment. This is to 

further ensure that payment is more 

accurately aligned with actual patient 

resource needs. As such, we believe the 

more granular structure of these 

functional levels provides the 

information needed on functional 

impairment and allows greater 

flexibility for clinicians to tailor a more 

patient-centered home health plan of 

care to meet the individualized needs of 

their patients. As HHA-reported OASIS 

information determines the functional 

impairment levels, accurate reporting on 

the OASIS will help to ensure that the 

case-mix adjustment is in alignment 

with the actual level of functional 

impairment. 

Concerns regarding HHAs changing 

the way they provide services to eligible 

beneficiaries, specifically therapy 

services, should be mitigated by the 

more granular functional impairment 

level adjustment (for example, 

functional thresholds which vary 

between each of the clinical groups). 

The functional impairment level casemix payment adjustment is reflective of 

the resource costs associated with these 

reported OASIS items and therefore 

ensures greater payment accuracy based 

on patient characteristics. We believe 

that this approach will help to maintain 

and could potentially increase access to 

needed therapy services. We remind 

HHAs that the provision of home health 

services should be based on patient 

characteristics and identified care 

needs. This could include those patients 

with complex and/or chronic care 

needs, or those patients requiring home 

health services over a longer period of 

time or for which there is no 

measureable or expected improvement. 

While the majority of commenters 

agreed that the elimination of therapy 

thresholds is appropriate because of the 

financial incentive to overprovide 

therapy services, some commenters 

indicated that the reductions in 

payment for therapy visits could result 

in a decrease in HHA viability and 

could force some HHAs to go out of 

business, such as those HHAs that 

provide more therapy services than 

nursing. We note that section 

51001(a)(3) of the BBA of 2018 amended 

section 1894(b)(4)(B) of the Act to 

prohibit the use of therapy thresholds as 

part of the overall case-mix adjustment 

for CY 2020 and subsequent years. 

Consequently, we have no regulatory 

discretion in this matter. 

Several commenters provided 

recommendations for additional OASIS 

items for inclusion to account for 

functional impairment. Most notably, 

commenters suggested adding OASIS 

items associated with cognition, 

instrumental activities of daily living 

(IADLs), and caregiver support. The 

current HH PPS does not use OASIS 

items associated with cognition, IADLs, 

or caregiver support to case-mix adjust 

for payment. Nonetheless, the 

relationship between cognition and 

functional status is important and welldocumented in health care literature so 

we included them in our analysis 

because they generally have clinical 

significance based on research and 

standards of practice. As described in 

the CY 2018 HH PPS proposed rule and 

the technical report, we examined every 

single OASIS item and its effect on 

costs. These included those OASIS 

items associated with cognition, IADLs, 

and caregiver support. Only those 

OASIS items associated with higher 

resource costs were considered for 

inclusion in the functional level 

adjustment in the HHGM. Despite 

commenters’ recommendations, the 

variables suggested were only 

minimally helpful in explaining or 

predicting resource use and most 

reduced the amount of actual payment. 

As such, we excluded variables 

associated with cognition, IADLs, and 

caregiver support because they would 

decrease payment for a home health 

period of care which is counter to the 

purpose of a case-mix adjustment under 

the HHGM. The complete analysis of all 

of the OASIS items can be found in the 

HHGM technical report on the HHA 

Center web page.47

After careful consideration of all 

comments received on the functional 

level adjustment as part of an alternative 

case-mix adjustment methodology, we 

believe that the three PDGM functional 

impairment levels in each of the six 

clinical groups are designed to capture 

the level of functional impairment. We 

believe that the more granular nature of 

the levels of functional impairment by 

clinical group would encourage 

therapists to determine the appropriate 

services for their patients in accordance 

with identified needs rather than an 

arbitrary threshold of visits. While the 

functional level adjustment is not meant 

to be a direct proxy for the therapy 

thresholds, the PDGM has other casemix variables to adjust payment for 

those patients requiring multiple 

therapy disciplines or those chronically 

ill patients with significant functional 

impairment. We believe that also 

accounting for timing, source of 

admission, clinical group (meaning the 

primary reason the patient requires 

home health services), and the presence 

of comorbidities will provide the 

necessary adjustments to payment to 

ensure that care needs are met based on 


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48 In Version OASIS C–2 (effective 1/1/2018), 

three responses are excluded: #8:‘‘currently reports 

exhaustion’’, #9: ‘‘other risks not listed in 1–8’’, and 

#10: ‘‘None of the above’’. 

actual patient characteristics. Therefore, 

we continue to uphold that the 

functional impairment level adjustment 

is sufficient and along with the other 

case-mix adjustments, payment will 

better align with the costs of providing 

services. 

In summary, we are proposing that 

the OASIS items identified in the CY 

2018 HH PPS proposed rule would be 

included as part of the functional 

impairment level payment adjustment 

under the proposed PDGM. These items 

are: 

• M1800: Grooming. 

• M1810: Current Ability to Dress 

Upper Body. 

• M1820: Current Ability to Dress 

Lower Body. 

• M1830: Bathing. 

• M1840: Toilet Transferring. 

• M1850: Transferring. 

• M1860: Ambulation/Locomotion. 

• M1033: Risk of Hospitalization.48

We are proposing that a home health 

period of care receives points based on 

each of the responses associated with 

the proposed functional OASIS items 

which are then converted into a table of 

points corresponding to increased 

resource use (See Table 41). The sum of 

all of these points results in a functional 

score which is used to group home 

health periods into a functional level 

with similar resource use. We are 

proposing three functional levels of low 

impairment, medium impairment, and 

high impairment with approximately 

one third of home health periods from 

each of the clinical groups within each 

functional impairment level (See Table 

42). The CY 2018 HH PPS Proposed rule 

(82 FR 35320) and the technical report 

posted on the HHA Center web page 

provide a more detailed explanation as 

to the construction of these functional 

impairment levels using the proposed 

OASIS items. 

TABLE 41—OASIS POINTS TABLE FOR THOSE ITEMS ASSOCIATED WITH INCREASED RESOURCE USE USING A REDUCED

SET OF OASIS ITEMS, CY 2017 

Response category Points 

(2017) 

Percent 

of periods 

in 2017 

with this 

response 

category 

M1800: Grooming ...................................................................................... 1 ....................................................... 4 56.9 

M1810: Current Ability to Dress Upper Body ............................................ 1 ....................................................... 6 60.0 

M1820: Current Ability to Dress Lower Body ............................................ 1 ....................................................... 5 59.3 

2 ................................................................................................................. 11 ..................................................... 20.9 

M1830: Bathing .......................................................................................... 1 ....................................................... 3 18.0 

2 ....................................................... 13 53.1 

3 ....................................................... 21 23.6 

M1840: Toilet Transferring ........................................................................ 1 ....................................................... 4 32.1 

M1850: Transferring .................................................................................. 1 ....................................................... 4 37.8 

2 ....................................................... 8 59.2 

M1860: Ambulation/Locomotion ................................................................ 1 ....................................................... 11 25.2 

2 ....................................................... 13 52.8 

3 ....................................................... 25 14.8 

M1033: Risk of Hospitalization .................................................................. 4 or more items checked ................ 11 17.8 

Source: CY 2017 Medicare claims data for episodes ending on or before December 31, 2017(as of March 2, 2018). 

TABLE 42—THRESHOLDS FOR FUNCTIONAL LEVELS BY CLINICAL GROUP, CY 2017 

Clinical group Level of impairment Points 

(2017 data) 

MMTA ........................................................................................................................... Low ........................................................... 0–37 

Medium ..................................................... 38–53 

High ........................................................... 54+ 

Behavioral Health ......................................................................................................... Low ........................................................... 0–38 

Medium ..................................................... 39–53 

High ........................................................... 54+ 

Complex Nursing Interventions .................................................................................... Low ........................................................... 0–36 

Medium ..................................................... 37–57 

High ........................................................... 58+ 

Musculoskeletal Rehabilitation ..................................................................................... Low ........................................................... 0–39 

Medium ..................................................... 40–53 

High ........................................................... 54+ 

Neuro Rehabilitation ..................................................................................................... Low ........................................................... 0–45 

Medium ..................................................... 46–61 

High ........................................................... 62+ 

Wound .......................................................................................................................... Low ........................................................... 0–43 

Medium ..................................................... 44–63 

High ........................................................... 64+ 

Source: CY 2017 Medicare claims data for episodes ending on or before December 31, 2017 (as of March 2, 2018). 


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Table 43 shows the average resource 

use by clinical group and functional 

level for CY 2017: 

TABLE 43—AVERAGE RESOURCE USE BY CLINICAL GROUP AND FUNCTIONAL LEVEL, CY 2017 

Mean 

resource use 

Frequency of 

periods 

Percent of 

periods 

Standard 

deviation of 

resource use 

25th 

Percentile of 

resource use 

Median 

resource use 

75th 

Percentile of 

resource use 

MMTA—Low ................ $1,236.05 1,650,146 19.1 $1,076.20 $511.06 $907.38 $1,632.74 

MMTA—Medium .......... 1,487.24 1,709,484 19.8 1,162.37 628.29 1,202.12 2,020.73 

MMTA—High ................ 1,667.38 1,402,299 16.3 1,274.53 719.29 1,371.99 2,265.39 

Behavioral Health—Low 971.26 98,193 1.1 845.25 397.45 686.39 1,285.36 

Behavioral Health—Medium .......................... 1,309.40 93,145 1.1 990.34 557.57 1,064.55 1,784.48 

Behavioral Health— 

High .......................... 1,485.06 96,899 1.1 1,092.42 653.44 1,233.97 2,027.14 

Complex—Low ............. 1,313.78 104,504 1.2 1,194.16 553.50 953.84 1,669.45 

Complex—Medium ....... 1,668.06 104,717 1.2 1,415.99 694.35 1,275.32 2,202.65 

Complex—High ............ 1,771.05 97,779 1.1 1,527.71 704.28 1,336.79 2,361.61 

MS Rehab—Low .......... 1,545.07 587,873 6.8 1,048.07 779.96 1,323.12 2,055.60 

MS Rehab—Medium .... 1,731.15 536,444 6.2 1,111.26 931.97 1,527.46 2,293.96 

MS Rehab—High ......... 1,900.89 469,117 5.4 1,243.84 1,009.66 1,672.76 2,520.57 

Neuro—Low ................. 1,591.74 308,011 3.6 1,163.69 744.21 1,323.86 2,127.18 

Neuro—Medium ........... 1,833.25 287,788 3.3 1,271.31 900.27 1,568.22 2,467.92 

Neuro—High ................ 1,945.49 303,787 3.5 1,420.56 899.47 1,618.16 2,629.54 

Wound—Low ................ 1,663.25 275,383 3.2 1,271.45 790.83 1,328.52 2,152.26 

Wound—Medium ......... 1,893.35 238,063 2.8 1,370.79 927.26 1,550.78 2,475.29 

Wound—High ............... 2,044.09 261,144 3.0 1,520.35 975.19 1,644.10 2,669.06 

Total ...................... 1,570.68 8,624,776 100.0 1,221.38 679.12 1,272.18 2,117.47 

Source: CY 2017 Medicare claims data for episodes ending on or before December 31, 2017 (as of March 2, 2018). 

Like the annual recalibration of the 

case-mix weights under the current HH 

PPS, we expect that annual 

recalibrations would also be made to the 

PDGM case-mix weights. If the PDGM is 

finalized for CY 2020, we will update 

the functional points and thresholds 

using the most current claims data 

available. Likewise, we would continue 

to analyze all of the components of the 

case-mix adjustment, including 

adjustment for functional status, and 

would make refinements as necessary to 

ensure that payment for home health 

periods are in alignment with the costs 

of providing care. We invite comments 

on the proposed OASIS items and the 

associated points and thresholds used to 

group patients into three functional 

impairment levels under the PDGM, as 

outlined above. 

8. Comorbidity Adjustment 

The alternative case-mix adjustment 

methodology proposed in the CY 2018 

HH PPS proposed rule, groups home 

health periods based on the primary 

reason for home health care (principal 

diagnosis), functional level, admission 

source, and timing. To further account 

for differences in resource use based on 

patient characteristics, in the CY 2018 

HH PPS proposed rule, we proposed to 

use the presence of comorbidities as 

part of the overall case-mix adjustment 

under the alternative case-mix 

adjustment methodology. Specifically, 

we proposed a home health specific list 

of comorbidities further refined into 

broader, body system-based categories 

and more granular subcategories to 

capture those conditions that affect 

resource costs during a home health 

period of care. The proposed 

comorbidities included those conditions 

that represent more than 0.1 percent of 

periods and had at least as high as the 

median resource use as they indicate a 

direct relationship between the 

comorbidity and resource utilization. 

Specifically, we proposed a list based 

on the principles of patient assessment 

by body systems and their associated 

diseases, conditions, and injuries to 

develop larger categories of conditions 

that identified clinically relevant 

relationships associated with increased 

resource use. The broad, body systembased categories we proposed to use to 

group comorbidities within the HHGM 

included the following: 

• Heart Disease 

• Respiratory Disease 

• Circulatory Disease and Blood 

Disorders 

• Cerebral Vascular Disease 

• Gastrointestinal Disease 

• Neurological Disease and Associated 

Conditions 

• Endocrine Disease 

• Neoplasms 

• Genitourinary and Renal Disease 

• Skin Disease 

• Musculoskeletal Disease or Injury 

• Behavioral Health (including 

Substance Use Disorders) 

• Infectious Disease 

These broad categories used to group 

comorbidities within the alternative 

case-mix adjustment methodology were 

further refined by grouping similar 

diagnoses within the broad categories 

into statistically and clinically 

significant subcategories which would 

receive the comorbidity adjustment in 

the alternative case-mix adjustment 

methodology (for example, Heart 

Disease 1; Cerebral Vascular Disease 4). 

All of the comorbidity diagnoses 

grouped into the aforementioned 

categories and subcategories are posted 

on the Home Health Agency web page 

and listed in the HHGM technical report 

at the following link: https://

www.cms.gov/Center/Provider-Type/ 

Home-Health-Agency-HHA-Center.html. 

We originally proposed that if a 30- 

day period of care had at least one 

secondary diagnosis reported on the 

home health claim that fell into one of 

the subcategories, that 30-day period of 

care would receive a comorbidity 

adjustment to account for higher costs 

associated with the comorbidity. 

Therefore, the payment adjustment for 

comorbidities would be predicated on 

the presence of one of the identified 

diagnoses within the subcategories 

associated with increased resource use 

at or above the median. The comorbidity 

adjustment amount would be the same 


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49 ‘‘Outcome and Assessment I OASIS 

Information Set C2 Guidance Manual Effective 

January 1, 2018 accessed at https://www.cms.gov/ 

Medicare/Quality-Initiatives-Patient-AssessmentInstruments/HomeHealthQualityInits/Downloads/ 

OASIS–C2-Guidance-Manual-Effective_1_1_18.pdf. 

across all of the subcategories. A 30-day 

period of care would receive only one 

comorbidity adjustment regardless of 

the number of secondary diagnoses 

reported on the home health claim that 

fell into one of the subcategories 

associated with higher resource use. If 

there is no reported diagnosis that meets 

the comorbidity adjustment criteria, the 

30-day period of care would not qualify 

for the payment adjustment. 

We solicited comments on the 

proposed comorbidity adjustment in the 

CY 2018 HH PPS proposed rule, 

including the proposed comorbidity 

diagnoses and their associated 

subcategories, as part of the overall 

alternative case-mix adjustment 

methodology. While all commenters 

supported the inclusion of a 

comorbidity adjustment, most 

commenters said that a single 

comorbidity payment amount as part of 

the overall case-mix adjustment is 

insufficient to fully capture the home 

health needs and resource costs 

associated with the presence of 

comorbidities. Meeting the requirement 

of section 51001 of the BBA of 2018, a 

Technical Expert Panel (TEP) was 

convened in February 2018 to collect 

perspectives, feedback, and identify and 

prioritize recommendations from a wide 

variety of industry experts and patient 

representatives regarding the public 

comments received on the proposed 

alternative case-mix adjustment 

methodology. Comments on the 

comorbidity adjustment and suggestions 

for refinement to this adjustment were 

very similar between those received on 

the CY 2018 HH PPS proposed rule and 

those made by the TEP participants. 

Specifically, the majority of commenters 

stated that the presence of multiple 

comorbidities has more of an effect on 

home health resource use than a single 

comorbidity and that any case-mix 

adjustment should account for multiple 

comorbidities. There was general 

agreement that most home health 

patients have multiple conditions which 

increase the complexity of their care 

and affects the ability to care for one’s 

self at home. Several suggested that 

CMS should let the data help determine 

how many comorbidity adjustment 

levels there should be and what 

percentage of 30-day periods should be 

in each level. Some commenters stated 

they preferred specificity and 

complexity over simplicity if the 

complexity improved accuracy. Others 

suggested including interactions 

between comorbidities in the model, 

specifically interactions of comorbid 

conditions with the principal diagnosis 

and with other comorbidities. 

Commenters and TEP members alike 

focused on those conditions they saw as 

most impactful on the provision of care 

to home health beneficiaries. These 

conditions included chronic respiratory 

and cardiac conditions, as well as 

psychological and diabetes-related 

conditions. Most encouraged CMS to 

continue to develop a system to allow 

for appropriate changes to be made over 

time to the list of comorbidity 

subcategories that would assign a 

comorbidity adjustment to a 30-day 

period of care. 

We agree with commenters that the 

relationship between comorbidities and 

resource use can be complex and that a 

single adjustment, regardless of the type 

or number of comorbidities, may be 

insufficient to fully capture the resource 

use of a varied population of home 

health beneficiaries. However, we also 

recognize that adjusting payment based 

on the number of reported comorbidities 

may encourage HHAs to inappropriately 

report comorbid conditions in order to 

increase payment, regardless of any true 

impact on the home health plan of care. 

Currently, OASIS instructions state that 

clinicians must list each diagnosis for 

which the patient is receiving home care 

and to enter the level of highest 

specificity as required by ICD–10 CM 

coding guidelines. These instructions 

state that clinicians should list 

diagnoses in the order that best reflects 

the seriousness of each condition and 

supports the disciplines and services 

provided.49 We also note that CMS 

currently uses interaction items as part 

of the HH PPS case-mix adjustments. In 

the CY 2008 HH PPS final rule (72 FR 

49772), we added secondary diagnoses 

and their interactions with the principal 

diagnosis as part of the clinical 

dimension in the overall case-mix 

adjustment. However, analysis since 

then has shown that nominal case-mix 

growth became an ongoing issue 

resulting from the incentive in the 

current HH PPS to code only those 

conditions associated with clinical 

points even though the data did not 

show an associated increase in resource 

utilization. Likewise, when we looked at 

a multi-morbidity approach to the 

overall case-mix adjustment to a home 

health period of care, for the CY 2018 

HH PPS proposed rule our analysis 

showed that the reporting of secondary 

diagnoses on home health claims was 

not robust enough to support a payment 

adjustment based on the presence of 

multiple comorbidities. This means that 

the data did not show significant 

variations in resource use with an 

increase in reported comorbidities. 

In spite of concerns of potential 

manipulation of coding patterns to 

increase payment due to the 

comorbidity adjustment, the results of 

our most recent analyses for this 

proposed rule show compelling 

evidence that patients with certain 

comorbidities and interactions of certain 

comorbid conditions (as described later 

in this section) have home health 

episodes with higher resource use than 

home health episodes without those 

comorbidities or interactions. The goal 

of our analyses was to identify those 

clinically and statistically significant 

comorbidities and interactions that 

could be used to further case-mix adjust 

a 30-day home health period of care. As 

a result of these analyses, we identified 

that there were certain individual 

comorbidity subgroups and interactions 

of the comorbidity subgroups (for 

example, having diagnoses associated 

with two of the comorbidity subgroups) 

which could be used as part of the 

comorbidity case-mix adjustment in the 

PDGM. 

To identify these relationships with 

resource utilization, we looked at all 

diagnoses reported on the OASIS 

(M1021, M1023, and M1025) for each 

30-day period of care. These fields 

represent 18 different diagnoses which 

could be reported on the OASIS. In the 

PDGM, the principal diagnosis assigns 

each 30-day period of care into a 

clinical group which identifies the 

primary reason the patient requires 

home health services. During our 

analysis, this usually was the reported 

principal diagnosis, but in cases where 

the diagnosis did not link to a clinical 

group (for example, the diagnosis could 

not be reported as a principal diagnosis 

in accordance with ICD–10 CM coding 

guidelines), we used a secondary 

diagnosis to assign the 30-day period of 

care into a clinical group. Any other 

diagnoses, except the one used to link 

the 30-day period of care into a clinical 

group, were considered comorbidities. 

However, if one of those comorbid 

diagnoses was in the same ICD–10 CM 

block of codes as the diagnosis used to 

place the 30-day period of care into a 

clinical group, then that comorbid 

diagnosis was excluded (for example, if 

the reported principal diagnosis was 

I63.432, Cerebral infarction due to 

embolism of left post cerebral artery, 

and the reported secondary diagnosis 

was I65.01, Occlusion and stenosis of 

right vertebral artery, I65.01 would be 

excluded as a comorbidity as both codes 

are in the same block of ICD–10 


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diagnosis codes, Cerebrovascular 

Diseases, and both would group into the 

Neuro clinical group if reported as the 

principal diagnosis). Then, we checked 

those reported comorbid diagnoses 

against the home health-specific 

comorbidity subgroup list to see if any 

reported secondary diagnoses are listed 

in a subgroup (for example, if a reported 

secondary diagnosis was I50.9, Heart 

Failure, unspecified, this diagnosis is 

found in the Heart 11 subgroup). 

We went through the following steps 

to determine which individual 

comorbidity subgroups would be used 

as part of the comorbidity adjustment: 

• After dropping the comorbidity 

subgroups with a small number of 30- 

day periods of care (for example, those 

that made up fewer than 0.1 percent of 

30-day periods of care), this left 59 

different comorbidity subgroups. 

• Of those, there are 56 comorbidity 

subgroups with a p-value less than or 

equal to 0.05. 

• Of those 56 subgroups, there are 22 

comorbidity subgroups that have a 

positive coefficient when regressing 

resource use on the comorbidity 

subgroups (and the interactions as 

described below) and indicators for the 

clinical group, functional level, 

admission source, and timing. We 

determine the median coefficient of 

those 22 comorbidity subgroups to be 

$60.67. 

• There are 11 comorbidity subgroups 

with coefficients that are at or above the 

median (for example, $60.67 or above). 

This is a decrease from the 15 subgroups 

presented in the CY 2018 HH PPS 

proposed rule. Potential reasons for this 

decrease include the use of CY 2017 

data in this analysis, whereas the 2018 

HH PPS proposed rule used CY 2016 

data; the combination and/or addition of 

comorbidity groups; and the inclusion 

of the interactions between the 

comorbidities. 

Those 11 individual comorbidity 

subgroups that are statistically and 

clinically significant for potential 

inclusion in the comorbidity case-mix 

adjustment are listed below in Table 44: 

TABLE 44—INDIVIDUAL SUBGROUPS FOR COMORBIDITY ADJUSTMENT

Comorbidity 

subgroup Description Coefficient 

Neuro 11 ............... Includes diabetic retinopathy and other blindness .......................................................................................... $61.23 

Neuro 10 ............... Includes diabetic neuropathies ........................................................................................................................ 67.98 

Circulatory 9 .......... Includes acute and chronic embolisms and thrombosis .................................................................................. 86.62 

Heart 11 ................ Includes heart failure ........................................................................................................................................ 101.57 

Cerebral 4 ............. Includes sequelae of cerebrovascular diseases .............................................................................................. 128.78 

Neuro 5 ................. Includes Parkinson’s Disease .......................................................................................................................... 144.99 

Skin 1 .................... Includes cutaneous abscess, cellulitis, and lymphangitis ................................................................................ 174.93 

Neuro 7 ................. Includes hemiplegia, paraplegia, and quadriplegia ......................................................................................... 204.42 

Circulatory 10 ........ Includes varicose veins with ulceration ........................................................................................................... 215.67 

Skin 3 .................... Include diseases of arteries, arterioles and capillaries with ulceration and non-pressure chronic ulcers ...... 365.78 

Skin 4 .................... Includes stages Two-Four and unstageable pressure ulcers by site .............................................................. 484.83 

Source: CY 2017 Medicare claims data for episodes ending on or before December 31, 2017 (as of March 2, 2018). 

Next, we examined the impact of 

interactions between the various 

comorbidity subgroups on resource use. 

The following steps show how we 

identified which interactions (for 

example, diagnoses from two different 

comorbidity subgroups) had a clinically 

and statistically significant relationship 

with increased resource utilization and 

could be used for the comorbidity 

adjustment: 

• After dropping the combinations of 

comorbidity subgroups and interactions 

with a small number of 30-day periods 

of care (that is, those that made up fewer 

than 0.1 percent of 30-day periods of 

care), there are 343 different 

comorbidity subgroup interactions (for 

example, comorbidity subgroup 

interaction Skin 1 plus Skin 3). As 

mentioned previously, we regressed 

resource use on the comorbidity 

subgroups, the interactions, and 

indicators for the clinical group, 

functional level, admission source, and 

timing. 

• From that regression, we found 187 

comorbidity subgroup interactions with 

a p-value less than or equal to 0.05. 

• Of those 187 comorbidity subgroup 

interactions, there are 27 comorbidity 

subgroup interactions where the 

coefficient on the comorbidity subgroup 

interaction term plus the coefficients on 

both single comorbidity variables equals 

a value that exceeds $150. We used 

$150 as the inclusion threshold as this 

amount is approximately three times 

that of the median value for the 

individual comorbidity subgroups and 

we believe is appropriate to reflect the 

increased resource use associated with 

comorbidity interactions. The 27 

comorbidity subgroup interactions that 

are statistically and clinically significant 

for potential inclusion in the 

comorbidity adjustment are listed in 

Table 45. 

TABLE 45—COMORBIDITY SUBGROUP INTERACTIONS FOR COMORBIDITY ADJUSTMENT

Comorbidity 

subgroup 

interaction 

Comorbidity 

subgroup Description Comorbidity subgroup Description 

Sum of 

interaction 

term plus 

single 

comorbidity 

coefficients 

1 .................. Circulatory 4 .... Hypertensive Chronic Kidney Disease ........ Neuro 11 ......... Includes diabetic retinopathy and other blindness .... $151.98 

2 .................. Endocrine 3 ..... Diabetes with Complications ........................ Neuro 7 ........... Includes hemiplegia, paraplegia, and quadriplegia ... 162.35 

3 .................. Neuro 3 ........... Dementia in diseases classified elsewhere Skin 3 .............. Diseases of arteries, arterioles and capillaries with 

ulceration and non-pressure chronic ulcers.

190.30 

4 .................. Circulatory 4 .... Hypertensive Chronic Kidney Disease ........ Skin 1 .............. Cutaneous abscess, cellulitis, and lymphangitis ....... 193.33 

5 .................. Cerebral 4 ....... Sequelae of Cerebrovascular Diseases ...... Heart 11 .......... Heart Failure .............................................................. 195.55 

6 .................. Neuro 7 ........... Includes hemiplegia, paraplegia, and quadriplegia.Renal 3 ............ Nephrogenic Diabetes Insipidus ................................ 202.44 

7 .................. Circulatory 10 .. Includes varicose veins with ulceration ....... Endocrine 3 ..... Diabetes with Complications ...................................... 205.52 

8 .................. Heart 11 .......... Heart Failure ................................................ Neuro 5 ........... Parkinson’s Disease ................................................... 212.88 


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50https://www.cms.gov/Center/Provider-Type/ 

Home-Health-Agency-HHA-Center.html. 

TABLE 45—COMORBIDITY SUBGROUP INTERACTIONS FOR COMORBIDITY ADJUSTMENT—Continued 

Comorbidity 

subgroup 

interaction 

Comorbidity 

subgroup Description Comorbidity subgroup Description 

Sum of 

interaction 

term plus 

single 

comorbidity 

coefficients 

9 .................. Heart 12 .......... Other Heart Diseases .................................. Skin 3 .............. Diseases of arteries, arterioles and capillaries with 

ulceration and non-pressure chronic ulcers.

260.83 

10 ................ Neuro 3 ........... Dementia in diseases classified elsewhere Skin 4 .............. Stages Two-Four and unstageable pressure ulcers 

by site.

274.16 

11 ................ Behavioral 2 .... Mood Disorders ............................................ Skin 3 .............. Diseases of arteries, arterioles and capillaries with 

ulceration and non-pressure chronic ulcers.

287.42 

12 ................ Circulatory 10 .. Includes varicose veins with ulceration ....... Heart 11 .......... Heart Failure .............................................................. 292.39 

13 ................ Circulatory 4 .... Hypertentive Chronic Kidney Disease ......... Skin 3 .............. Diseases of arteries, arterioles and capillaries with 

ulceration and non-pressure chronic ulcers.

296.70 

14 ................ Renal 1 ............ Chronic kidney disease and ESRD ............. Skin 3 .............. Diseases of arteries, arterioles and capillaries with 

ulceration and non-pressure chronic ulcers.

300.31 

15 ................ Respiratory 5 ... COPD and Asthma ...................................... Skin 3 .............. Diseases of arteries, arterioles and capillaries with 

ulceration and non-pressure chronic ulcers.

306.63 

16 ................ Skin 1 .............. Cutaneous abscess, cellulitis, and lymphangitis.Skin 3 .............. Diseases of arteries, arterioles and capillaries with 

ulceration and non-pressure chronic ulcers.

390.47 

17 ................ Renal 3 ............ Nephrogenic Diabetes Insipidus .................. Skin 4 .............. Stages Two-Four and unstageable pressure ulcers 

by site.

422.34 

18 ................ Heart 11 .......... Heart Failure ................................................ Skin 3 .............. Diseases of arteries, arterioles and capillaries with 

ulceration and non-pressure chronic ulcers.

422.20 

19 ................ Heart 12 .......... Other Heart Diseases .................................. Skin 4 .............. Stages Two-Four and unstageable pressure ulcers 

by site.

423.08 

20 ................ Respiratory 5 ... COPD and Asthma ...................................... Skin 4 .............. Stages Two-Four and unstageable pressure ulcers 

by site.

428.02 

21 ................ Circulatory 7 .... Atherosclerosis ............................................. Skin 3 .............. Diseases of arteries, arterioles and capillaries with 

ulceration and non-pressure chronic ulcers.

432.46 

22 ................ Renal 1 ............ Chronic kidney disease and ESRD ............. Skin 4 .............. Stages Two-Four and unstageable pressure ulcers 

by site.

436.39 

23 ................ Endocrine 3 ..... Diabetes with Complications ........................ Skin 4 .............. Stages Two-Four and unstageable pressure ulcers 

by site.

487.96 

24 ................ Endocrine 3 ..... Diabetes with Complications ........................ Skin 3 .............. Diseases of arteries, arterioles and capillaries with 

ulceration and non-pressure chronic ulcers.

504.54 

25 ................ Circulatory 4 .... Hypertensive Chronic Kidney Disease ........ Skin 4 .............. Stages Two-Four and unstageable pressure ulcers 

by site.

509.63 

26 ................ Heart 11 .......... Heart Failure ................................................ Skin 4 .............. Stages Two-Four and unstageable pressure ulcers 

by site.

529.47 

27 ................ Skin 3 .............. Diseases of arteries, arterioles and capillaries with ulceration and non-pressure 

chronic ulcers.

Skin 4 .............. Stages Two-Four and unstageable pressure ulcers 

by site.

750.85 

Source: CY 2017 Medicare claims data for episodes ending on or before December 31, 2017 (as of March 2, 2018). 

In order to be considered a 

comorbidity subgroup interaction, at 

least two reported diagnoses, must 

occur in the above corresponding 

combinations, as shown in Table 45. For 

example, one diagnosis from Heart 11 

must be reported along with at least one 

diagnosis from Neuro 5 in order to 

qualify for comorbidity subgroup 

interaction 8. In other words, the 

comorbidity subgroups are not 

interchangeable between the interaction 

groups (for example, reported 

conditions from the Renal 1 and 

Respiratory 5 subgroups would not be 

considered an interaction for purposes 

of the comorbidity adjustment). 

For illustrative purposes, this would 

mean that if a 30-day period of care had 

the following secondary diagnoses 

reported, I50.22, chronic systolic 

(congestive) heart failure and G20, 

Parkinson’s Disease (these diagnoses fall 

under comorbidity subgroups Heart 11 

and Neuro 5 respectively and are in the 

same comorbidity subgroup interaction), 

this interaction of comorbid conditions 

results in a higher level of resource use 

than just having a comorbid diagnosis 

classified in Heart 11 or in Neuro 5. 

There will be an updated PDGM 

Grouper Tool posted on the HHA Center 

web page that HHAs can access to 

simulate the HIPPS code and case-mix 

weight under the PDGM.50 This Grouper 

Tool allows providers to fill in 

information, including the 

comorbidities, to determine whether a 

home health period of care would 

receive a comorbidity adjustment under 

the PDGM. 

The comorbidity interactions identify 

subgroup combinations of comorbidities 

that are associated with higher levels of 

resource use. As such, we believe that 

the comorbidity adjustment payment 

should be dependent on whether the 30- 

day period of care has an individual 

comorbidity subgroup associated with 

higher resource use or there is a 

comorbidity subgroup interaction 

resulting in higher resource use. 

Therefore, we propose to have three 

levels in the PDGM comorbidity casemix adjustment: No Comorbidity 

Adjustment, Low Comorbidity 

Adjustment, and High Comorbidity 

Adjustment. This means that depending 

on if and which secondary diagnoses are 

reported, a 30-day period of care may 

receive no comorbidity adjustment 

(meaning, no secondary diagnoses exist 

or do not meet the criteria for a 

comorbidity adjustment), a ‘‘low’’ 

comorbidity adjustment, or a ‘‘high’’ 

comorbidity adjustment. We propose 

that home health 30-day periods of care 

can receive a comorbidity payment 

adjustment under the following 

circumstances: 

• Low comorbidity adjustment: There 

is a reported secondary diagnosis that 

falls within one of the home-health 

specific individual comorbidity 

subgroups, as listed in Table 44, (for 

example, Heart Disease 11, Cerebral 

Vascular Disease 4, etc.) associated with 

higher resource use, or; 

• High comorbidity adjustment: 

There are two or more secondary 

diagnoses reported that fall within the 


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same comorbidity subgroup interaction, 

as listed in Table 45, (for example, Heart 

11 plus Neuro 5) that are associated 

with higher resource use. 

Under the PDGM, a 30-day period of 

care can receive payment for a low 

comorbidity adjustment or a high 

comorbidity adjustment, but not both. A 

30-day period of care can receive only 

one low comorbidity adjustment 

regardless of the number of secondary 

diagnoses reported on the home health 

claim that fell into one of the individual 

comorbidity subgroups or one high 

comorbidity adjustment regardless of 

the number of comorbidity group 

interactions, as applicable. The low 

comorbidity adjustment amount would 

be the same across all 11 individual 

comorbidity subgroups. Similarly, the 

high comorbidity adjustment amount 

would be the same across all 27 

comorbidity subgroup interactions. See 

Table 48 in section III.F.10 of this 

proposed rule for the coefficient 

amounts associated with both the low 

and high comorbidity adjustment, as 

well as for all of the case-mix variables 

in the PDGM. If a 30-day home health 

period of care does not have any 

reported comorbidities that fall into one 

of the payment adjustments described 

above, there would be no comorbidity 

adjustment applied. Table 46 illustrates 

the average resource use for each of the 

comorbidity levels as described in this 

section. 

TABLE 46—AVERAGE RESOURCE USE BY COMORBIDITY ADJUSTMENT, CY 2017 

Mean 

resource use 

Frequency 

of periods 

Percent 

of periods 

Standard 

deviation of 

resource use 

25th 

percentile of 

resource use 

Median 

resource use 

75th 

percentile of 

resource use 

No Comorbidity Adjustment .......................... $1,539.92 5,402,694 62.6 $1,183.86 $673.27 $1,253.95 $2,078.68 

Comorbidity Adjustment—Has at least 

one comorbidity from 

comorbidity list, no 

interaction from interaction list .................. 1,575.12 2,721,969 31.6 1,248.71 658.77 1,262.47 2,131.92 

Comorbidity Adjustment—Has at least 

one interaction from 

interaction list ........... 1,878.84 500,113 5.8 1,412.06 880.07 1,523.87 2,469.93 

Total ...................... 1,570.68 8,624,776 100.0 1,221.38 679.12 1,272.18 2,117.47 

Source: CY 2017 Medicare claims data for episodes ending on or before December 31, 2017 (as of March 2, 2018). 

Changing to three comorbidity levels 

results in 216 possible case-mix groups 

for the purposes of adjusting payment in 

the PDGM. While this is more case-mix 

groups than the 144 case-mix groups 

proposed in the CY 2018 HH PPS 

proposed rule, this change is responsive 

to the comments received regarding 

refinements to the comorbidity 

adjustment without being unduly 

complex. We believe that this method 

for adjusting payment for the presence 

of comorbidities is more robust, 

reflective of patient characteristics, 

better aligns payment with actual 

resource use, and addresses comments 

received from the CY 2018 HH PPS 

proposed rule and recommendations 

from TEP members. The comorbidity 

payment adjustment takes into account 

the presence of individual comorbid 

conditions, as well as the interactions 

between multiple comorbid conditions, 

and reflects the types of conditions most 

commonly seen in home health patients. 

Similar to monitoring of nominal casemix growth under the current HH PPS, 

upon implementation of the PDGM, 

CMS will monitor the reporting of 

secondary diagnoses to determine 

whether adjustments to payment based 

on the number of reported comorbidities 

is resulting in HHAs inappropriately 

reporting comorbid conditions solely for 

the purpose of increased payment and 

appropriate program integrity actions 

will be taken. 

As mentioned previously in this 

section, there will be an updated PDGM 

Grouper Tool posted on the HHA Center 

web page which will be key to 

understanding whether a 30-day home 

health period of care would receive a 

no, low, or high comorbidity adjustment 

under the PDGM. If implemented, we 

would continue to examine the 

relationship of reported comorbidities 

on resource utilization and make the 

appropriate payment refinements to 

help ensure that payment is in 

alignment with the actual costs of 

providing care. We invite comments on 

the change to the comorbidity case-mix 

adjustment in the PDGM including the 

three comorbidity levels: No 

Comorbidity, Low Comorbidity, and 

High Comorbidity Adjustment. We also 

invite comments on the payment 

associated with the Low Comorbidity 

and High Comorbidity Adjustment to 

account for increased resource 

utilization resulting from the presence 

of certain comorbidities and 

comorbidity interactions. 

9. Change in the Low-Utilization 

Payment Adjustment (LUPA) Threshold 

Currently, a 60-day episode with four 

or fewer visits is paid the national per 

visit amount by discipline, adjusted by 

the appropriate wage index based on the 

site of service of the beneficiary, instead 

of the full 60-day episode payment 

amount. Such payment adjustments are 

called Low Utilization Payment 

Adjustments (LUPAs). While the 

alternative case-mix model proposed in 

the CY 2018 HH PPS proposed rule still 

included LUPAs, the approach to 

calculating the LUPA thresholds needed 

to change due to the proposed change in 

the unit of payment to 30-day periods of 

care from 60-day episodes. The 30-day 

periods of care have substantially more 

episodes with four or fewer visits than 

60-day episodes. To create LUPA 

thresholds we proposed in the CY 2018 

HH PPS proposed rule to set the LUPA 

threshold at the 10th percentile value of 

visits or 2, whichever is higher, for each 

payment group, (82 FR 35324). 

We received comments in response to 

the CY 2018 HH PPS proposed rule on 

maintaining the use of a single LUPA 

threshold instead of varying the 

thresholds at the subgroup level. Other 

commenters expressed concern that the 

variable LUPA thresholds will add 


amozie on DSK3GDR082PROD with PROPOSALS2
32412 Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules 

additional administrative burden and 

create additional opportunity for error. 

After analyzing the data to evaluate the 

potential impact, we believe that the 

change to a 30-day period of care under 

the proposed PDGM from the current 

60-day episode warrants variable LUPA 

thresholds depending on the payment 

group to which it is assigned. We 

believe that the proposed LUPA 

thresholds that vary based on the casemix assignment for the 30-day period of 

care in the proposed PDGM is an 

improvement over the current 5 visit 

threshold that does not vary by case-mix 

assignment. This is the same approach 

proposed in the CY 2018 proposed rule 

where LUPA thresholds would vary by 

case-mix group. LUPA thresholds that 

vary by case-mix group take into 

account different resource use patterns 

based on beneficiaries’ clinical 

characteristics. Additionally, we do not 

believe that the case-mix-specific LUPA 

thresholds would result in additional 

administrative burden as LUPA visits 

are billed the same as non-LUPA 

periods. Likewise, the PDGM will not be 

implemented until January 1, 2020, 

giving HHAs and vendors sufficient 

time to make necessary changes to their 

systems and to ensure that appropriate 

quality checks are in place to minimize 

any claims errors. Therefore, we 

propose to vary the LUPA threshold for 

a 30-day period of care under the PDGM 

depending on the PDGM payment group 

to which it is assigned. 

We note that in the current payment 

system, approximately 8 percent of 

episodes are LUPAs. Under the PDGM, 

consistent with the CY 2018 HH PPS 

proposed rule, we propose the 10th 

percentile value of visits or 2 visits, 

whichever is higher, in order to target 

approximately the same percentage of 

LUPAs (approximately 7.1 percent of 

30-day periods would be LUPAs 

(assuming no behavior change)). For 

example, for episodes in the payment 

group corresponding to ‘‘MMTA– 

Functional Level Medium—Early 

Timing—Institutional Admission—No 

Comorbidity’’ (HIPPS code 2AB1 in 

Table 47), the threshold is four visits. If 

a home health 30-day period of care is 

assigned to that particular payment 

group had three or fewer visits the HHA 

would be paid using the national pervisit rates in section III.C.4 of this 

proposed rule instead of the case-mix 

adjusted 30-day period of care payment 

amount. The LUPA thresholds for the 

PDGM payment group with the 

corresponding HIPPS code is listed in 

Table 47. 

TABLE 47—PROPOSED LUPA THRESHOLDS FOR THE PROPOSED PDGM PAYMENT GROUPS

HIPPS Clinical group and functional level Timing and admission source 

Comorbidity 

adjustment 

(0 = none, 

1 = single 

comorbidity, 

2 = interaction) 

Visit 

threshold 

(10th percentile 

or 2—whichever 

is higher) 

1AA11 ............... MMTA—Low ........................................... Early—Community .................................. 0 4 

1AA21 ............... MMTA—Low ........................................... Early—Community .................................. 1 4 

1AA31 ............... MMTA—Low ........................................... Early—Community .................................. 2 4 

1AB11 ............... MMTA—Medium ..................................... Early—Community .................................. 0 4 

1AB21 ............... MMTA—Medium ..................................... Early—Community .................................. 1 4 

1AB31 ............... MMTA—Medium ..................................... Early—Community .................................. 2 5 

1AC11 ............... MMTA—High ........................................... Early—Community .................................. 0 4 

1AC21 ............... MMTA—High ........................................... Early—Community .................................. 1 4 

1AC31 ............... MMTA—High ........................................... Early—Community .................................. 2 4 

1BA11 ............... Neuro—Low ............................................ Early—Community .................................. 0 4 

1BA21 ............... Neuro—Low ............................................ Early—Community .................................. 1 5 

1BA31 ............... Neuro—Low ............................................ Early—Community .................................. 2 5 

1BB11 ............... Neuro—Medium ...................................... Early—Community .................................. 0 5 

1BB21 ............... Neuro—Medium ...................................... Early—Community .................................. 1 5 

1BB31 ............... Neuro—Medium ...................................... Early—Community .................................. 2 5 

1BC11 ............... Neuro—High ........................................... Early—Community .................................. 0 4 

1BC21 ............... Neuro—High ........................................... Early—Community .................................. 1 5 

1BC31 ............... Neuro—High ........................................... Early—Community .................................. 2 5 

1CA11 ............... Wound—Low ........................................... Early—Community .................................. 0 4 

1CA21 ............... Wound—Low ........................................... Early—Community .................................. 1 4 

1CA31 ............... Wound—Low ........................................... Early—Community .................................. 2 4 

1CB11 ............... Wound—Medium .................................... Early—Community .................................. 0 5 

1CB21 ............... Wound—Medium .................................... Early—Community .................................. 1 5 

1CB31 ............... Wound—Medium .................................... Early—Community .................................. 2 5 

1CC11 ............... Wound—High .......................................... Early—Community .................................. 0 4 

1CC21 ............... Wound—High .......................................... Early—Community .................................. 1 5 

1CC31 ............... Wound—High .......................................... Early—Community .................................. 2 4 

1DA11 ............... Complex—Low ........................................ Early—Community .................................. 0 3 

1DA21 ............... Complex—Low ........................................ Early—Community .................................. 1 2 

1DA31 ............... Complex—Low ........................................ Early—Community .................................. 2 4 

1DB11 ............... Complex—Medium .................................. Early—Community .................................. 0 3 

1DB21 ............... Complex—Medium .................................. Early—Community .................................. 1 3 

1DB31 ............... Complex—Medium .................................. Early—Community .................................. 2 4 

1DC11 ............... Complex—High ....................................... Early—Community .................................. 0 3 

1DC21 ............... Complex—High ....................................... Early—Community .................................. 1 3 

1DC31 ............... Complex—High ....................................... Early—Community .................................. 2 3 

1EA11 ............... MS Rehab—Low ..................................... Early—Community .................................. 0 5 

1EA21 ............... MS Rehab—Low ..................................... Early—Community .................................. 1 5 

1EA31 ............... MS Rehab—Low ..................................... Early—Community .................................. 2 5 

1EB11 ............... MS Rehab—Medium ............................... Early—Community .................................. 0 5 

1EB21 ............... MS Rehab—Medium ............................... Early—Community .................................. 1 5 

1EB31 ............... MS Rehab—Medium ............................... Early—Community .................................. 2 5 


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Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules 32413 

TABLE 47—PROPOSED LUPA THRESHOLDS FOR THE PROPOSED PDGM PAYMENT GROUPS—Continued 

HIPPS Clinical group and functional level Timing and admission source 

Comorbidity 

adjustment 

(0 = none, 

1 = single 

comorbidity, 

2 = interaction) 

Visit 

threshold 

(10th percentile 

or 2—whichever 

is higher) 

1EC11 ............... MS Rehab—High .................................... Early—Community .................................. 0 5 

1EC21 ............... MS Rehab—High .................................... Early—Community .................................. 1 5 

1EC31 ............... MS Rehab—High .................................... Early—Community .................................. 2 5 

1FA11 ............... Behavioral Health—Low ......................... Early—Community .................................. 0 3 

1FA21 ............... Behavioral Health—Low ......................... Early—Community .................................. 1 3 

1FA31 ............... Behavioral Health—Low ......................... Early—Community .................................. 2 3 

1FB11 ............... Behavioral Health—Medium ................... Early—Community .................................. 0 4 

1FB21 ............... Behavioral Health—Medium ................... Early—Community .................................. 1 4 

1FB31 ............... Behavioral Health—Medium ................... Early—Community .................................. 2 4 

1FC11 ............... Behavioral Health—High ......................... Early—Community .................................. 0 4 

1FC21 ............... Behavioral Health—High ......................... Early—Community .................................. 1 4 

1FC31 ............... Behavioral Health—High ......................... Early—Community .................................. 2 4 

2AA11 ............... MMTA—Low ........................................... Early—Institutional .................................. 0 3

2AA21 ............... MMTA—Low ........................................... Early—Institutional .................................. 1 4

2AA31 ............... MMTA—Low ........................................... Early—Institutional .................................. 2 4

2AB11 ............... MMTA—Medium ..................................... Early—Institutional .................................. 0 4 

2AB21 ............... MMTA—Medium ..................................... Early—Institutional .................................. 1 5 

2AB31 ............... MMTA—Medium ..................................... Early—Institutional .................................. 2 5 

2AC11 ............... MMTA—High ........................................... Early—Institutional .................................. 0 4 

2AC21 ............... MMTA—High ........................................... Early—Institutional .................................. 1 4 

2AC31 ............... MMTA—High ........................................... Early—Institutional .................................. 2 4 

2BA11 ............... Neuro—Low ............................................ Early—Institutional .................................. 0 5 

2BA21 ............... Neuro—Low ............................................ Early—Institutional .................................. 1 5 

2BA31 ............... Neuro—Low ............................................ Early—Institutional .................................. 2 5 

2BB11 ............... Neuro—Medium ...................................... Early—Institutional .................................. 0 6 

2BB21 ............... Neuro—Medium ...................................... Early—Institutional .................................. 1 6 

2BB31 ............... Neuro—Medium ...................................... Early—Institutional .................................. 2 6 

2BC11 ............... Neuro—High ........................................... Early—Institutional .................................. 0 5 

2BC21 ............... Neuro—High ........................................... Early—Institutional .................................. 1 5 

2BC31 ............... Neuro—High ........................................... Early—Institutional .................................. 2 5 

2CA11 ............... Wound—Low ........................................... Early—Institutional .................................. 0 4 

2CA21 ............... Wound—Low ........................................... Early—Institutional .................................. 1 4 

2CA31 ............... Wound—Low ........................................... Early—Institutional .................................. 2 4 

2CB11 ............... Wound—Medium .................................... Early—Institutional .................................. 0 5 

2CB21 ............... Wound—Medium .................................... Early—Institutional .................................. 1 5 

2CB31 ............... Wound—Medium .................................... Early—Institutional .................................. 2 5 

2CC11 ............... Wound—High .......................................... Early—Institutional .................................. 0 4 

2CC21 ............... Wound—High .......................................... Early—Institutional .................................. 1 5 

2CC31 ............... Wound—High .......................................... Early—Institutional .................................. 2 4 

2DA11 ............... Complex—Low ........................................ Early—Institutional .................................. 0 3

2DA21 ............... Complex—Low ........................................ Early—Institutional .................................. 1 3

2DA31 ............... Complex—Low ........................................ Early—Institutional .................................. 2 4

2DB11 ............... Complex—Medium .................................. Early—Institutional .................................. 0 4 

2DB21 ............... Complex—Medium .................................. Early—Institutional .................................. 1 4 

2DB31 ............... Complex—Medium .................................. Early—Institutional .................................. 2 5 

2DC11 ............... Complex—High ....................................... Early—Institutional .................................. 0 4

2DC21 ............... Complex—High ....................................... Early—Institutional .................................. 1 4

2DC31 ............... Complex—High ....................................... Early—Institutional .................................. 2 4

2EA11 ............... MS Rehab—Low ..................................... Early—Institutional .................................. 0 5 

2EA21 ............... MS Rehab—Low ..................................... Early—Institutional .................................. 1 5 

2EA31 ............... MS Rehab—Low ..................................... Early—Institutional .................................. 2 5 

2EB11 ............... MS Rehab—Medium ............................... Early—Institutional .................................. 0 6 

2EB21 ............... MS Rehab—Medium ............................... Early—Institutional .................................. 1 6 

2EB31 ............... MS Rehab—Medium ............................... Early—Institutional .................................. 2 6 

2EC11 ............... MS Rehab—High .................................... Early—Institutional .................................. 0 6 

2EC21 ............... MS Rehab—High .................................... Early—Institutional .................................. 1 6 

2EC31 ............... MS Rehab—High .................................... Early—Institutional .................................. 2 6 

2FA11 ............... Behavioral Health—Low ......................... Early—Institutional .................................. 0 3 

2FA21 ............... Behavioral Health—Low ......................... Early—Institutional .................................. 1 3 

2FA31 ............... Behavioral Health—Low ......................... Early—Institutional .................................. 2 4 

2FB11 ............... Behavioral Health—Medium ................... Early—Institutional .................................. 0 4 

2FB21 ............... Behavioral Health—Medium ................... Early—Institutional .................................. 1 4 

2FB31 ............... Behavioral Health—Medium ................... Early—Institutional .................................. 2 5 

2FC11 ............... Behavioral Health—High ......................... Early—Institutional .................................. 0 4 

2FC21 ............... Behavioral Health—High ......................... Early—Institutional .................................. 1 4 

2FC31 ............... Behavioral Health—High ......................... Early—Institutional .................................. 2 5 

3AA11 ............... MMTA—Low ........................................... Late—Community ................................... 0 2 

3AA21 ............... MMTA—Low ........................................... Late—Community ................................... 1 2 


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32414 Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules 

TABLE 47—PROPOSED LUPA THRESHOLDS FOR THE PROPOSED PDGM PAYMENT GROUPS—Continued 

HIPPS Clinical group and functional level Timing and admission source 

Comorbidity 

adjustment 

(0 = none, 

1 = single 

comorbidity, 

2 = interaction) 

Visit 

threshold 

(10th percentile 

or 2—whichever 

is higher) 

3AA31 ............... MMTA—Low ........................................... Late—Community ................................... 2 3 

3AB11 ............... MMTA—Medium ..................................... Late—Community ................................... 0 2 

3AB21 ............... MMTA—Medium ..................................... Late—Community ................................... 1 2 

3AB31 ............... MMTA—Medium ..................................... Late—Community ................................... 2 3 

3AC11 ............... MMTA—High ........................................... Late—Community ................................... 0 2 

3AC21 ............... MMTA—High ........................................... Late—Community ................................... 1 2 

3AC31 ............... MMTA—High ........................................... Late—Community ................................... 2 3 

3BA11 ............... Neuro—Low ............................................ Late—Community ................................... 0 2 

3BA21 ............... Neuro—Low ............................................ Late—Community ................................... 1 2 

3BA31 ............... Neuro—Low ............................................ Late—Community ................................... 2 2 

3BB11 ............... Neuro—Medium ...................................... Late—Community ................................... 0 2 

3BB21 ............... Neuro—Medium ...................................... Late—Community ................................... 1 2 

3BB31 ............... Neuro—Medium ...................................... Late—Community ................................... 2 3 

3BC11 ............... Neuro—High ........................................... Late—Community ................................... 0 2 

3BC21 ............... Neuro—High ........................................... Late—Community ................................... 1 2 

3BC31 ............... Neuro—High ........................................... Late—Community ................................... 2 2 

3CA11 ............... Wound—Low ........................................... Late—Community ................................... 0 2 

3CA21 ............... Wound—Low ........................................... Late—Community ................................... 1 3 

3CA31 ............... Wound—Low ........................................... Late—Community ................................... 2 3 

3CB11 ............... Wound—Medium .................................... Late—Community ................................... 0 3 

3CB21 ............... Wound—Medium .................................... Late—Community ................................... 1 3 

3CB31 ............... Wound—Medium .................................... Late—Community ................................... 2 3 

3CC11 ............... Wound—High .......................................... Late—Community ................................... 0 3 

3CC21 ............... Wound—High .......................................... Late—Community ................................... 1 3 

3CC31 ............... Wound—High .......................................... Late—Community ................................... 2 3 

3DA11 ............... Complex—Low ........................................ Late—Community ................................... 0 2 

3DA21 ............... Complex—Low ........................................ Late—Community ................................... 1 2 

3DA31 ............... Complex—Low ........................................ Late—Community ................................... 2 2 

3DB11 ............... Complex—Medium .................................. Late—Community ................................... 0 2 

3DB21 ............... Complex—Medium .................................. Late—Community ................................... 1 2 

3DB31 ............... Complex—Medium .................................. Late—Community ................................... 2 2 

3DC11 ............... Complex—High ....................................... Late—Community ................................... 0 2 

3DC21 ............... Complex—High ....................................... Late—Community ................................... 1 2 

3DC31 ............... Complex—High ....................................... Late—Community ................................... 2 2 

3EA11 ............... MS Rehab—Low ..................................... Late—Community ................................... 0 2 

3EA21 ............... MS Rehab—Low ..................................... Late—Community ................................... 1 2 

3EA31 ............... MS Rehab—Low ..................................... Late—Community ................................... 2 2 

3EB11 ............... MS Rehab—Medium ............................... Late—Community ................................... 0 2 

3EB21 ............... MS Rehab—Medium ............................... Late—Community ................................... 1 2 

3EB31 ............... MS Rehab—Medium ............................... Late—Community ................................... 2 3 

3EC11 ............... MS Rehab—High .................................... Late—Community ................................... 0 2 

3EC21 ............... MS Rehab—High .................................... Late—Community ................................... 1 2 

3EC31 ............... MS Rehab—High .................................... Late—Community ................................... 2 3 

3FA11 ............... Behavioral Health—Low ......................... Late—Community ................................... 0 2 

3FA21 ............... Behavioral Health—Low ......................... Late—Community ................................... 1 2 

3FA31 ............... Behavioral Health—Low ......................... Late—Community ................................... 2 2 

3FB11 ............... Behavioral Health—Medium ................... Late—Community ................................... 0 2 

3FB21 ............... Behavioral Health—Medium ................... Late—Community ................................... 1 2 

3FB31 ............... Behavioral Health—Medium ................... Late—Community ................................... 2 2 

3FC11 ............... Behavioral Health—High ......................... Late—Community ................................... 0 2 

3FC21 ............... Behavioral Health—High ......................... Late—Community ................................... 1 2 

3FC31 ............... Behavioral Health—High ......................... Late—Community ................................... 2 2 

4AA11 ............... MMTA—Low ........................................... Late—Institutional ................................... 0 3

4AA21 ............... MMTA—Low ........................................... Late—Institutional ................................... 1 3

4AA31 ............... MMTA—Low ........................................... Late—Institutional ................................... 2 3

4AB11 ............... MMTA—Medium ..................................... Late—Institutional ................................... 0 3 

4AB21 ............... MMTA—Medium ..................................... Late—Institutional ................................... 1 3 

4AB31 ............... MMTA—Medium ..................................... Late—Institutional ................................... 2 4 

4AC11 ............... MMTA—High ........................................... Late—Institutional ................................... 0 3 

4AC21 ............... MMTA—High ........................................... Late—Institutional ................................... 1 3 

4AC31 ............... MMTA—High ........................................... Late—Institutional ................................... 2 4 

4BA11 ............... Neuro—Low ............................................ Late—Institutional ................................... 0 3 

4BA21 ............... Neuro—Low ............................................ Late—Institutional ................................... 1 4 

4BA31 ............... Neuro—Low ............................................ Late—Institutional ................................... 2 3 

4BB11 ............... Neuro—Medium ...................................... Late—Institutional ................................... 0 4 

4BB21 ............... Neuro—Medium ...................................... Late—Institutional ................................... 1 4 

4BB31 ............... Neuro—Medium ...................................... Late—Institutional ................................... 2 5 

4BC11 ............... Neuro—High ........................................... Late—Institutional ................................... 0 4 


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Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules 32415 

TABLE 47—PROPOSED LUPA THRESHOLDS FOR THE PROPOSED PDGM PAYMENT GROUPS—Continued 

HIPPS Clinical group and functional level Timing and admission source 

Comorbidity 

adjustment 

(0 = none, 

1 = single 

comorbidity, 

2 = interaction) 

Visit 

threshold 

(10th percentile 

or 2—whichever 

is higher) 

4BC21 ............... Neuro—High ........................................... Late—Institutional ................................... 1 4 

4BC31 ............... Neuro—High ........................................... Late—Institutional ................................... 2 4 

4CA11 ............... Wound—Low ........................................... Late—Institutional ................................... 0 3 

4CA21 ............... Wound—Low ........................................... Late—Institutional ................................... 1 3 

4CA31 ............... Wound—Low ........................................... Late—Institutional ................................... 2 3 

4CB11 ............... Wound—Medium .................................... Late—Institutional ................................... 0 4 

4CB21 ............... Wound—Medium .................................... Late—Institutional ................................... 1 4 

4CB31 ............... Wound—Medium .................................... Late—Institutional ................................... 2 4 

4CC11 ............... Wound—High .......................................... Late—Institutional ................................... 0 3 

4CC21 ............... Wound—High .......................................... Late—Institutional ................................... 1 4 

4CC31 ............... Wound—High .......................................... Late—Institutional ................................... 2 4 

4DA11 ............... Complex—Low ........................................ Late—Institutional ................................... 0 2

4DA21 ............... Complex—Low ........................................ Late—Institutional ................................... 1 3

4DA31 ............... Complex—Low ........................................ Late—Institutional ................................... 2 3

4DB11 ............... Complex—Medium .................................. Late—Institutional ................................... 0 3 

4DB21 ............... Complex—Medium .................................. Late—Institutional ................................... 1 3 

4DB31 ............... Complex—Medium .................................. Late—Institutional ................................... 2 4 

4DC11 ............... Complex—High ....................................... Late—Institutional ................................... 0 3

4DC21 ............... Complex—High ....................................... Late—Institutional ................................... 1 3

4DC31 ............... Complex—High ....................................... Late—Institutional ................................... 2 3

4EA11 ............... MS Rehab—Low ..................................... Late—Institutional ................................... 0 3 

4EA21 ............... MS Rehab—Low ..................................... Late—Institutional ................................... 1 3 

4EA31 ............... MS Rehab—Low ..................................... Late—Institutional ................................... 2 3 

4EB11 ............... MS Rehab—Medium ............................... Late—Institutional ................................... 0 4 

4EB21 ............... MS Rehab—Medium ............................... Late—Institutional ................................... 1 4 

4EB31 ............... MS Rehab—Medium ............................... Late—Institutional ................................... 2 4 

4EC11 ............... MS Rehab—High .................................... Late—Institutional ................................... 0 4 

4EC21 ............... MS Rehab—High .................................... Late—Institutional ................................... 1 4 

4EC31 ............... MS Rehab—High .................................... Late—Institutional ................................... 2 4 

4FA11 ............... Behavioral Health—Low ......................... Late—Institutional ................................... 0 2 

4FA21 ............... Behavioral Health—Low ......................... Late—Institutional ................................... 1 2 

4FA31 ............... Behavioral Health—Low ......................... Late—Institutional ................................... 2 2 

4FB11 ............... Behavioral Health—Medium ................... Late—Institutional ................................... 0 3 

4FB21 ............... Behavioral Health—Medium ................... Late—Institutional ................................... 1 3 

4FB31 ............... Behavioral Health—Medium ................... Late—Institutional ................................... 2 3 

4FC11 ............... Behavioral Health—High ......................... Late—Institutional ................................... 0 3 

4FC21 ............... Behavioral Health—High ......................... Late—Institutional ................................... 1 3 

4FC31 ............... Behavioral Health—High ......................... Late—Institutional ................................... 2 4 

In summary, we propose to vary the 

LUPA threshold for a 30-day period of 

care under the PDGM depending on the 

PDGM payment group to which it is 

assigned. We also propose that the 

LUPA thresholds for each PDGM 

payment group would be re-evaluated 

every year based on the most current 

utilization data available. We invite 

public comments on the LUPA 

threshold methodology proposed for the 

PDGM and the associated regulations 

text changes in section III.F.13 of this 

proposed rule. 

10. HH PPS Case-Mix Weights Under 

the PDGM 

Section 1895(b)(4)(B) requires the 

Secretary to establish appropriate case 

mix adjustment factors for home health 

services in a manner that explains a 

significant amount of the variation in 

cost among different units of services. In 

the CY 2018 HH PPS proposed rule (82 

FR 35270), we proposed an alternative 

case-mix adjustment methodology to 

better align payment with patient care 

needs. The proposed alternative casemix adjustment methodology places 

patients into meaningful payment 

categories based on patient 

characteristics (principal diagnosis, 

functional level, comorbid conditions, 

referral source and timing). We did not 

finalize the alternative case-mix 

adjustment methodology in the CY 2018 

final rule in order to consider comments 

and feedback for any potential 

refinements to the model. Refinements 

were made to the comorbidity case-mix 

adjustment while all other variables 

remain as proposed in the CY 2018 HH 

PPS proposed rule (for example, clinical 

group, functional level, admission 

source, and episode timing). As outlined 

in previous sections of this proposed 

rule, we are again proposing an 

alternative case-mix adjustment 

methodology, called the PDGM, but this 

methodology now results in 216 unique 

case-mix groups. These 216 unique 

case-mix payment groups are called 

Home Health Resource Groups 

(HHRGs). In accordance with the BBA of 

2018, the proposed PDGM will be 

implemented in a budget neutral 

manner. 

To generate PDGM case-mix weights, 

we utilized a data file based on home 

health episodes of care, as reported in 

Medicare home health claims. The 

claims data provide episode-level data 

as well as visit-level data. The claims 

also provide data on whether nonroutine supplies (NRS) was provided 

during the episode and the total charges 

for NRS. We used CY 2017 home health 

claims data with linked OASIS 

assessment data to obtain patient 

characteristics. We determined the casemix weight for each of the different 

PDGM payment groups by regressing 


amozie on DSK3GDR082PROD with PROPOSALS2
32416 Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules 

resource use on a series of indicator 

variables for each of the categories using 

a fixed effects model. The regression 

measures resource use with the Cost per 

Minute (CPM) + NRS approach outlined 

in section III.F.2 of this proposed rule. 

The model used in the PDGM payment 

regression generates outcomes that are 

statistically significant and consistent 

with findings. 

We received comments in response to 

the proposed alternative case-mix 

adjustment methodology in the CY 2018 

HH PPS proposed rule on the standards 

for subsequent case-mix weight 

recalibration (nature and timing). 

Similar to the annual recalibration of 

the case-mix weights under the current 

HH PPS, annual recalibration will be 

made to the PDGM case-mix weights. 

We will make refinements as necessary 

to ensure that payment for home health 

periods are in alignment with costs. We 

note that this includes a re-calculation 

of the proposed PDGM case-mix weights 

for CY 2020 in the CY 2020 HH PPS 

proposed rule using CY 2018 home 

health claims data linked with OASIS 

assessment data. In other words, the 

table below represents the PDGM casemix weights if we were to implement 

the PDGM in CY 2019. However, since 

we are proposing to implement the 

PDGM on January 1, 2020, the actual 

PDGM case-mix weights for CY 2020 

will be updated in the CY 2020 HH PPS 

proposed rule. We also received a 

comment from MedPAC about the 

development of alternative case-mix 

adjustment methodology using the 

regression approach, which is a 

statistical estimate of the cost associated 

with a payment group instead of the 

actual cost. MedPAC stated that this 

approach results in estimated payments 

that may not equal the actual costs 

experienced by HHAs. As noted, CMS 

has used a regression approach since the 

inception of the HH PPS in 2000. The 

regression smoothens weights compared 

to a system where each payment group 

receives a weight that is based solely on 

the average resource use of all 30-day 

periods in a payment group compared to 

the overall average resource use across 

all 30 day periods. Smoothing the 

weights helps to see relationships 

between variables and foresee trends. In 

addition, using a regression approach to 

calculate case-mix weights allows CMS 

to use a fixed effects model, which will 

estimate the variation observed within 

individual HHAs and opposed to 

estimating the variation across HHAs. 

With the fixed effects, the coefficients 

should better estimate the relationship 

the regression variables have with 

resource use compared to not 

accounting for fixed effects. We 

continue to believe that using a 

regression approach for the calculation 

of the HH PPS case-mix weights is most 

appropriate. 

After best fitting the model on home 

health episodes from 2017 data, we used 

the estimated coefficients of the model 

to predict the expected average resource 

use of each episode based on the five 

PDGM categories. In order to normalize 

the results, we have divided the 

regression predicted resource use of 

each episode by the overall average 

resource use of all episodes used to 

estimate the model in order to calculate 

the case mix weight of all episodes 

within a particular payment group, 

where each payment group is defined as 

the unique combination of the 

subgroups within the five PDGM 

categories (admission source, timing of 

the 30-day period, clinical grouping, 

functional level, and comorbidity 

adjustment). The case-mix weight is 

then used to adjust the base payment 

rate to determine each period’s 

payment. Table 48 shows the 

coefficients of the payment regression 

used to generate the weights, and the 

coefficients divided by average resource 

use. Information can be found in section 

III.F.6 of this rule for the clinical groups, 

section III.F.7 of this rule for the 

functional levels, section III.F.5 for 

admission source, section III.F.4 for 

timing, and section III.F.8 for the 

comorbidity adjustment. 

TABLE 48—COEFFICIENT OF PAYMENT REGRESSION AND COEFFICIENT DIVIDED BY AVERAGE RESOURCE USE FOR PDGM 

PAYMENT GROUP

Variable Coefficient 

Coefficient 

divided 

by average 

resource use 

Clinical Group and Functional Level (MMTA—Low is excluded) 

MMTA—Medium Functional .................................................................................................................................... $237.83 0.1514 

MMTA—High Functional .......................................................................................................................................... 416.75 0.2653 

Behavioral Health—Low Functional ........................................................................................................................ ¥116.39 ¥0.0741 

Behavioral Health—Medium Functional .................................................................................................................. 169.86 0.1081 

Behavioral Health—High Functional ........................................................................................................................ 309.97 0.1974 

Complex—Low Functional ....................................................................................................................................... ¥27.39 ¥0.0174 

Complex—Medium Functional ................................................................................................................................. 331.88 0.2113 

Complex—High Functional ...................................................................................................................................... 476.69 0.3035 

MS Rehab—Low Functional .................................................................................................................................... 141.37 0.0900 

MS Rehab—Medium Functional .............................................................................................................................. 338.96 0.2158 

MS Rehab—High Functional ................................................................................................................................... 558.95 0.3559 

Neuro—Low Functional ........................................................................................................................................... 329.19 0.2096 

Neuro—Medium Functional ..................................................................................................................................... 593.98 0.3782 

Neuro—High Functional .......................................................................................................................................... 711.48 0.4530 

Wound—Low Functional .......................................................................................................................................... 368.43 0.2346 

Wound—Medium Functional ................................................................................................................................... 628.37 0.4001 

Wound—High Functional ......................................................................................................................................... 822.84 0.5239 

Referral Source With Timing (Community Early excluded) 

Community—Late .................................................................................................................................................... ¥646.84 ¥0.4118 

Institutional—Early ................................................................................................................................................... 278.85 0.1775 

Institutional—Late .................................................................................................................................................... 45.71 0.0291 


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Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules 32417 

TABLE 48—COEFFICIENT OF PAYMENT REGRESSION AND COEFFICIENT DIVIDED BY AVERAGE RESOURCE USE FOR PDGM 

PAYMENT GROUP—Continued 

Variable Coefficient 

Coefficient 

divided 

by average 

resource use 

Comorbidity Adjustment (No Comorbidity Adjustment Group is excluded) 

Comorbidity Adjustment—Has at least one comorbidity from comorbidity list, no interaction from interaction list 92.44 0.0589 

Comorbidity Adjustment—Has at least one interaction from interaction list ........................................................... 345.20 0.2198 

Constant ................................................................................................................................................................... $1,560.37 0.9934 

Average Resource Use ........................................................................................................................................... $1,570.68 ........................

N .............................................................................................................................................................................. 8,624,776 ........................

Adj. R-Squared ........................................................................................................................................................ 0.2925 ........................

Source: CY 2017 Medicare claims data for episodes ending on or before December 31, 2017 (as of March 2, 2018) for which we had a linked 

OASIS assessment. LUPA episodes, outlier episodes, and episodes with PEP adjustments were excluded. 

Table 49 presents the case-mix weight 

for each HHRG in the regression model 

(Table 48). LUPA episodes, outlier 

episodes, and episodes with PEP 

adjustments were excluded. Please find 

LUPA information in section III.F.9 of 

this rule. Weights are determined by 

first calculating the predicted resource 

use for episodes with a particular 

combination of admission source, 

episode timing, clinical grouping, 

functional level, and comorbidity 

adjustment. This combination specific 

calculation is then divided by the 

average resource use of all the episodes 

that were used to estimate the standard 

30-day payment rate, which is 

$1,570.68. The resulting ratio represents 

the case-mix weight for that particular 

combination of a HHRG payment group. 

The adjusted R-squared value for this 

model is 0.2925 which is slightly higher 

than the adjusted R-squared value of 

0.2704 that we proposed in CY 2018 by 

using the CY 2016 claims data. The 

adjusted R-squared value provides a 

measure of how well observed outcomes 

are replicated by the model, based on 

the proportion of total variation of 

outcomes explained by the model. 

As noted above, there are 216 

different HHRG payment groups under 

the PDGM. There are 15 HHRG payment 

groups that represent roughly 50.2 

percent of the total episodes. There are 

61 HHRG payment groups that represent 

roughly 1.0 percent of total episodes. 

The HHRG payment group with the 

smallest weight has a weight of 0.5075 

(community admitted, late, behavioral 

health, low functional impairment level, 

with no comorbidity adjustment). The 

HHRG payment group with the largest 

weight has a weight of 1.9146 

(institutional admitted, early, wound, 

high functional impairment level, with 

interactive comorbidity adjustment). 

TABLE 49—CASE MIX WEIGHTS FOR EACH HHRG PAYMENT GROUP

HIPPS Clinical group and functional level Timing and 

admission source 

Comorbidity 

adjustment 

Proposed 

CY 2019 

weight 

1AA11 ........... MMTA—Low ................................................... Early—Community .......................................... 0 0.9934 

1AA21 ........... MMTA—Low ................................................... Early—Community .......................................... 1 1.0523 

1AA31 ........... MMTA—Low ................................................... Early—Community .......................................... 2 1.2132 

1AB11 ........... MMTA—Medium ............................................. Early—Community .......................................... 0 1.1449 

1AB21 ........... MMTA—Medium ............................................. Early—Community .......................................... 1 1.2037 

1AB31 ........... MMTA—Medium ............................................. Early—Community .......................................... 2 1.3646 

1AC11 ........... MMTA—High ................................................... Early—Community .......................................... 0 1.2588 

1AC21 ........... MMTA—High ................................................... Early—Community .......................................... 1 1.3176 

1AC31 ........... MMTA—High ................................................... Early—Community .......................................... 2 1.4785 

1BA11 ........... Neuro—Low .................................................... Early—Community .......................................... 0 1.2030 

1BA21 ........... Neuro—Low .................................................... Early—Community .......................................... 1 1.2619 

1BA31 ........... Neuro—Low .................................................... Early—Community .......................................... 2 1.4228 

1BB11 ........... Neuro—Medium .............................................. Early—Community .......................................... 0 1.3716 

1BB21 ........... Neuro—Medium .............................................. Early—Community .......................................... 1 1.4305 

1BB31 ........... Neuro—Medium .............................................. Early—Community .......................................... 2 1.5914 

1BC11 ........... Neuro—High ................................................... Early—Community .......................................... 0 1.4464 

1BC21 ........... Neuro—High ................................................... Early—Community .......................................... 1 1.5053 

1BC31 ........... Neuro—High ................................................... Early—Community .......................................... 2 1.6662 

1CA11 ........... Wound—Low ................................................... Early—Community .......................................... 0 1.2280 

1CA21 ........... Wound—Low ................................................... Early—Community .......................................... 1 1.2869 

1CA31 ........... Wound—Low ................................................... Early—Community .......................................... 2 1.4478 

1CB11 ........... Wound—Medium ............................................ Early—Community .......................................... 0 1.3935 

1CB21 ........... Wound—Medium ............................................ Early—Community .......................................... 1 1.4523 

1CB31 ........... Wound—Medium ............................................ Early—Community .......................................... 2 1.6133 

1CC11 .......... Wound—High .................................................. Early—Community .......................................... 0 1.5173 

1CC21 .......... Wound—High .................................................. Early—Community .......................................... 1 1.5762 

1CC31 .......... Wound—High .................................................. Early—Community .......................................... 2 1.7371 

1DA11 ........... Complex—Low ................................................ Early—Community .......................................... 0 0.9760 


amozie on DSK3GDR082PROD with PROPOSALS2
32418 Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules 

TABLE 49—CASE MIX WEIGHTS FOR EACH HHRG PAYMENT GROUP—Continued 

HIPPS Clinical group and functional level Timing and 

admission source 

Comorbidity 

adjustment 

Proposed 

CY 2019 

weight 

1DA21 ........... Complex—Low ................................................ Early—Community .......................................... 1 1.0348 

1DA31 ........... Complex—Low ................................................ Early—Community .......................................... 2 1.1958 

1DB11 ........... Complex—Medium .......................................... Early—Community .......................................... 0 1.2047 

1DB21 ........... Complex—Medium .......................................... Early—Community .......................................... 1 1.2636 

1DB31 ........... Complex—Medium .......................................... Early—Community .......................................... 2 1.4245 

1DC11 .......... Complex—High ............................................... Early—Community .......................................... 0 1.2969 

1DC21 .......... Complex—High ............................................... Early—Community .......................................... 1 1.3558 

1DC31 .......... Complex—High ............................................... Early—Community .......................................... 2 1.5167 

1EA11 ........... MS Rehab—Low ............................................. Early—Community .......................................... 0 1.0834 

1EA21 ........... MS Rehab—Low ............................................. Early—Community .......................................... 1 1.1423 

1EA31 ........... MS Rehab—Low ............................................. Early—Community .......................................... 2 1.3032 

1EB11 ........... MS Rehab—Medium ....................................... Early—Community .......................................... 0 1.2092 

1EB21 ........... MS Rehab—Medium ....................................... Early—Community .......................................... 1 1.2681 

1EB31 ........... MS Rehab—Medium ....................................... Early—Community .......................................... 2 1.4290 

1EC11 ........... MS Rehab—High ............................................ Early—Community .......................................... 0 1.3493 

1EC21 ........... MS Rehab—High ............................................ Early—Community .......................................... 1 1.4082 

1EC31 ........... MS Rehab—High ............................................ Early—Community .......................................... 2 1.5691 

1FA11 ........... Behavioral Health—Low ................................. Early—Community .......................................... 0 0.9193 

1FA21 ........... Behavioral Health—Low ................................. Early—Community .......................................... 1 0.9782 

1FA31 ........... Behavioral Health—Low ................................. Early—Community .......................................... 2 1.1391 

1FB11 ........... Behavioral Health—Medium ........................... Early—Community .......................................... 0 1.1016 

1FB21 ........... Behavioral Health—Medium ........................... Early—Community .......................................... 1 1.1604 

1FB31 ........... Behavioral Health—Medium ........................... Early—Community .......................................... 2 1.3214 

1FC11 ........... Behavioral Health—High ................................. Early—Community .......................................... 0 1.1908 

1FC21 ........... Behavioral Health—High ................................. Early—Community .......................................... 1 1.2496 

1FC31 ........... Behavioral Health—High ................................. Early—Community .......................................... 2 1.4106 

2AA11 ........... MMTA—Low ................................................... Early—Institutional .......................................... 0 1.1710 

2AA21 ........... MMTA—Low ................................................... Early—Institutional .......................................... 1 1.2298 

2AA31 ........... MMTA—Low ................................................... Early—Institutional .......................................... 2 1.3907 

2AB11 ........... MMTA—Medium ............................................. Early—Institutional .......................................... 0 1.3224 

2AB21 ........... MMTA—Medium ............................................. Early—Institutional .......................................... 1 1.3812 

2AB31 ........... MMTA—Medium ............................................. Early—Institutional .......................................... 2 1.5422 

2AC11 ........... MMTA—High ................................................... Early—Institutional .......................................... 0 1.4363 

2AC21 ........... MMTA—High ................................................... Early—Institutional .......................................... 1 1.4951 

2AC31 ........... MMTA—High ................................................... Early—Institutional .......................................... 2 1.6561 

2BA11 ........... Neuro—Low .................................................... Early—Institutional .......................................... 0 1.3805 

2BA21 ........... Neuro—Low .................................................... Early—Institutional .......................................... 1 1.4394 

2BA31 ........... Neuro—Low .................................................... Early—Institutional .......................................... 2 1.6003 

2BB11 ........... Neuro—Medium .............................................. Early—Institutional .......................................... 0 1.5491 

2BB21 ........... Neuro—Medium .............................................. Early—Institutional .......................................... 1 1.6080 

2BB31 ........... Neuro—Medium .............................................. Early—Institutional .......................................... 2 1.7689 

2BC11 ........... Neuro—High ................................................... Early—Institutional .......................................... 0 1.6239 

2BC21 ........... Neuro—High ................................................... Early—Institutional .......................................... 1 1.6828 

2BC31 ........... Neuro—High ................................................... Early—Institutional .......................................... 2 1.8437 

2CA11 ........... Wound—Low ................................................... Early—Institutional .......................................... 0 1.4055 

2CA21 ........... Wound—Low ................................................... Early—Institutional .......................................... 1 1.4644 

2CA31 ........... Wound—Low ................................................... Early—Institutional .......................................... 2 1.6253 

2CB11 ........... Wound—Medium ............................................ Early—Institutional .......................................... 0 1.5710 

2CB21 ........... Wound—Medium ............................................ Early—Institutional .......................................... 1 1.6299 

2CB31 ........... Wound—Medium ............................................ Early—Institutional .......................................... 2 1.7908 

2CC11 .......... Wound—High .................................................. Early—Institutional .......................................... 0 1.6948 

2CC21 .......... Wound—High .................................................. Early—Institutional .......................................... 1 1.7537 

2CC31 .......... Wound—High .................................................. Early—Institutional .......................................... 2 1.9146 

2DA11 ........... Complex—Low ................................................ Early—Institutional .......................................... 0 1.1535 

2DA21 ........... Complex—Low ................................................ Early—Institutional .......................................... 1 1.2124 

2DA31 ........... Complex—Low ................................................ Early—Institutional .......................................... 2 1.3733 

2DB11 ........... Complex—Medium .......................................... Early—Institutional .......................................... 0 1.3823 

2DB21 ........... Complex—Medium .......................................... Early—Institutional .......................................... 1 1.4411 

2DB31 ........... Complex—Medium .......................................... Early—Institutional .......................................... 2 1.6020 

2DC11 .......... Complex—High ............................................... Early—Institutional .......................................... 0 1.4745 

2DC21 .......... Complex—High ............................................... Early—Institutional .......................................... 1 1.5333 

2DC31 .......... Complex—High ............................................... Early—Institutional .......................................... 2 1.6942 

2EA11 ........... MS Rehab—Low ............................................. Early—Institutional .......................................... 0 1.2610 

2EA21 ........... MS Rehab—Low ............................................. Early—Institutional .......................................... 1 1.3198 

2EA31 ........... MS Rehab—Low ............................................. Early—Institutional .......................................... 2 1.4807 

2EB11 ........... MS Rehab—Medium ....................................... Early—Institutional .......................................... 0 1.3868 

2EB21 ........... MS Rehab—Medium ....................................... Early—Institutional .......................................... 1 1.4456 

2EB31 ........... MS Rehab—Medium ....................................... Early—Institutional .......................................... 2 1.6065 

2EC11 ........... MS Rehab—High ............................................ Early—Institutional .......................................... 0 1.5268 

2EC21 ........... MS Rehab—High ............................................ Early—Institutional .......................................... 1 1.5857 


amozie on DSK3GDR082PROD with PROPOSALS2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules 32419 

TABLE 49—CASE MIX WEIGHTS FOR EACH HHRG PAYMENT GROUP—Continued 

HIPPS Clinical group and functional level Timing and 

admission source 

Comorbidity 

adjustment 

Proposed 

CY 2019 

weight 

2EC31 ........... MS Rehab—High ............................................ Early—Institutional .......................................... 2 1.7466 

2FA11 ........... Behavioral Health—Low ................................. Early—Institutional .......................................... 0 1.0969 

2FA21 ........... Behavioral Health—Low ................................. Early—Institutional .......................................... 1 1.1557 

2FA31 ........... Behavioral Health—Low ................................. Early—Institutional .......................................... 2 1.3166 

2FB11 ........... Behavioral Health—Medium ........................... Early—Institutional .......................................... 0 1.2791 

2FB21 ........... Behavioral Health—Medium ........................... Early—Institutional .......................................... 1 1.3380 

2FB31 ........... Behavioral Health—Medium ........................... Early—Institutional .......................................... 2 1.4989 

2FC11 ........... Behavioral Health—High ................................. Early—Institutional .......................................... 0 1.3683 

2FC21 ........... Behavioral Health—High ................................. Early—Institutional .......................................... 1 1.4272 

2FC31 ........... Behavioral Health—High ................................. Early—Institutional .......................................... 2 1.5881 

3AA11 ........... MMTA—Low ................................................... Late—Community ........................................... 0 0.5816 

3AA21 ........... MMTA—Low ................................................... Late—Community ........................................... 1 0.6405 

3AA31 ........... MMTA—Low ................................................... Late—Community ........................................... 2 0.8014 

3AB11 ........... MMTA—Medium ............................................. Late—Community ........................................... 0 0.7330 

3AB21 ........... MMTA—Medium ............................................. Late—Community ........................................... 1 0.7919 

3AB31 ........... MMTA—Medium ............................................. Late—Community ........................................... 2 0.9528 

3AC11 ........... MMTA—High ................................................... Late—Community ........................................... 0 0.8469 

3AC21 ........... MMTA—High ................................................... Late—Community ........................................... 1 0.9058 

3AC31 ........... MMTA—High ................................................... Late—Community ........................................... 2 1.0667 

3BA11 ........... Neuro—Low .................................................... Late—Community ........................................... 0 0.7912 

3BA21 ........... Neuro—Low .................................................... Late—Community ........................................... 1 0.8500 

3BA31 ........... Neuro—Low .................................................... Late—Community ........................................... 2 1.0110 

3BB11 ........... Neuro—Medium .............................................. Late—Community ........................................... 0 0.9598 

3BB21 ........... Neuro—Medium .............................................. Late—Community ........................................... 1 1.0186 

3BB31 ........... Neuro—Medium .............................................. Late—Community ........................................... 2 1.1796 

3BC11 ........... Neuro—High ................................................... Late—Community ........................................... 0 1.0346 

3BC21 ........... Neuro—High ................................................... Late—Community ........................................... 1 1.0934 

3BC31 ........... Neuro—High ................................................... Late—Community ........................................... 2 1.2544 

3CA11 ........... Wound—Low ................................................... Late—Community ........................................... 0 0.8162 

3CA21 ........... Wound—Low ................................................... Late—Community ........................................... 1 0.8750 

3CA31 ........... Wound—Low ................................................... Late—Community ........................................... 2 1.0360 

3CB11 ........... Wound—Medium ............................................ Late—Community ........................................... 0 0.9817 

3CB21 ........... Wound—Medium ............................................ Late—Community ........................................... 1 1.0405 

3CB31 ........... Wound—Medium ............................................ Late—Community ........................................... 2 1.2015 

3CC11 .......... Wound—High .................................................. Late—Community ........................................... 0 1.1055 

3CC21 .......... Wound—High .................................................. Late—Community ........................................... 1 1.1643 

3CC31 .......... Wound—High .................................................. Late—Community ........................................... 2 1.3253 

3DA11 ........... Complex—Low ................................................ Late—Community ........................................... 0 0.5642 

3DA21 ........... Complex—Low ................................................ Late—Community ........................................... 1 0.6230 

3DA31 ........... Complex—Low ................................................ Late—Community ........................................... 2 0.7840 

3DB11 ........... Complex—Medium .......................................... Late—Community ........................................... 0 0.7929 

3DB21 ........... Complex—Medium .......................................... Late—Community ........................................... 1 0.8518 

3DB31 ........... Complex—Medium .......................................... Late—Community ........................................... 2 1.0127 

3DC11 .......... Complex—High ............................................... Late—Community ........................................... 0 0.8851 

3DC21 .......... Complex—High ............................................... Late—Community ........................................... 1 0.9440 

3DC31 .......... Complex—High ............................................... Late—Community ........................................... 2 1.1049 

3EA11 ........... MS Rehab—Low ............................................. Late—Community ........................................... 0 0.6716 

3EA21 ........... MS Rehab—Low ............................................. Late—Community ........................................... 1 0.7305 

3EA31 ........... MS Rehab—Low ............................................. Late—Community ........................................... 2 0.8914 

3EB11 ........... MS Rehab—Medium ....................................... Late—Community ........................................... 0 0.7974 

3EB21 ........... MS Rehab—Medium ....................................... Late—Community ........................................... 1 0.8563 

3EB31 ........... MS Rehab—Medium ....................................... Late—Community ........................................... 2 1.0172 

3EC11 ........... MS Rehab—High ............................................ Late—Community ........................................... 0 0.9375 

3EC21 ........... MS Rehab—High ............................................ Late—Community ........................................... 1 0.9963 

3EC31 ........... MS Rehab—High ............................................ Late—Community ........................................... 2 1.1573 

3FA11 ........... Behavioral Health—Low ................................. Late—Community ........................................... 0 0.5075 

3FA21 ........... Behavioral Health—Low ................................. Late—Community ........................................... 1 0.5664 

3FA31 ........... Behavioral Health—Low ................................. Late—Community ........................................... 2 0.7273 

3FB11 ........... Behavioral Health—Medium ........................... Late—Community ........................................... 0 0.6898 

3FB21 ........... Behavioral Health—Medium ........................... Late—Community ........................................... 1 0.7486 

3FB31 ........... Behavioral Health—Medium ........................... Late—Community ........................................... 2 0.9095 

3FC11 ........... Behavioral Health—High ................................. Late—Community ........................................... 0 0.7790 

3FC21 ........... Behavioral Health—High ................................. Late—Community ........................................... 1 0.8378 

3FC31 ........... Behavioral Health—High ................................. Late—Community ........................................... 2 0.9987 

4AA11 ........... MMTA—Low ................................................... Late—Institutional ........................................... 0 1.0225 

4AA21 ........... MMTA—Low ................................................... Late—Institutional ........................................... 1 1.0814 

4AA31 ........... MMTA—Low ................................................... Late—Institutional ........................................... 2 1.2423 

4AB11 ........... MMTA—Medium ............................................. Late—Institutional ........................................... 0 1.1740 

4AB21 ........... MMTA—Medium ............................................. Late—Institutional ........................................... 1 1.2328 

4AB31 ........... MMTA—Medium ............................................. Late—Institutional ........................................... 2 1.3937 


amozie on DSK3GDR082PROD with PROPOSALS2
32420 Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules 

TABLE 49—CASE MIX WEIGHTS FOR EACH HHRG PAYMENT GROUP—Continued 

HIPPS Clinical group and functional level Timing and 

admission source 

Comorbidity 

adjustment 

Proposed 

CY 2019 

weight 

4AC11 ........... MMTA—High ................................................... Late—Institutional ........................................... 0 1.2879 

4AC21 ........... MMTA—High ................................................... Late—Institutional ........................................... 1 1.3467 

4AC31 ........... MMTA—High ................................................... Late—Institutional ........................................... 2 1.5076 

4BA11 ........... Neuro—Low .................................................... Late—Institutional ........................................... 0 1.2321 

4BA21 ........... Neuro—Low .................................................... Late—Institutional ........................................... 1 1.2910 

4BA31 ........... Neuro—Low .................................................... Late—Institutional ........................................... 2 1.4519 

4BB11 ........... Neuro—Medium .............................................. Late—Institutional ........................................... 0 1.4007 

4BB21 ........... Neuro—Medium .............................................. Late—Institutional ........................................... 1 1.4595 

4BB31 ........... Neuro—Medium .............................................. Late—Institutional ........................................... 2 1.6205 

4BC11 ........... Neuro—High ................................................... Late—Institutional ........................................... 0 1.4755 

4BC21 ........... Neuro—High ................................................... Late—Institutional ........................................... 1 1.5344 

4BC31 ........... Neuro—High ................................................... Late—Institutional ........................................... 2 1.6953 

4CA11 ........... Wound—Low ................................................... Late—Institutional ........................................... 0 1.2571 

4CA21 ........... Wound—Low ................................................... Late—Institutional ........................................... 1 1.3160 

4CA31 ........... Wound—Low ................................................... Late—Institutional ........................................... 2 1.4769 

4CB11 ........... Wound—Medium ............................................ Late—Institutional ........................................... 0 1.4226 

4CB21 ........... Wound—Medium ............................................ Late—Institutional ........................................... 1 1.4814 

4CB31 ........... Wound—Medium ............................................ Late—Institutional ........................................... 2 1.6424 

4CC11 .......... Wound—High .................................................. Late—Institutional ........................................... 0 1.5464 

4CC21 .......... Wound—High .................................................. Late—Institutional ........................................... 1 1.6053 

4CC31 .......... Wound—High .................................................. Late—Institutional ........................................... 2 1.7662 

4DA11 ........... Complex—Low ................................................ Late—Institutional ........................................... 0 1.0051 

4DA21 ........... Complex—Low ................................................ Late—Institutional ........................................... 1 1.0639 

4DA31 ........... Complex—Low ................................................ Late—Institutional ........................................... 2 1.2249 

4DB11 ........... Complex—Medium .......................................... Late—Institutional ........................................... 0 1.2338 

4DB21 ........... Complex—Medium .......................................... Late—Institutional ........................................... 1 1.2927 

4DB31 ........... Complex—Medium .......................................... Late—Institutional ........................................... 2 1.4536 

4DC11 .......... Complex—High ............................................... Late—Institutional ........................................... 0 1.3260 

4DC21 .......... Complex—High ............................................... Late—Institutional ........................................... 1 1.3849 

4DC31 .......... Complex—High ............................................... Late—Institutional ........................................... 2 1.5458 

4EA11 ........... MS Rehab—Low ............................................. Late—Institutional ........................................... 0 1.1125 

4EA21 ........... MS Rehab—Low ............................................. Late—Institutional ........................................... 1 1.1714 

4EA31 ........... MS Rehab—Low ............................................. Late—Institutional ........................................... 2 1.3323 

4EB11 ........... MS Rehab—Medium ....................................... Late—Institutional ........................................... 0 1.2383 

4EB21 ........... MS Rehab—Medium ....................................... Late—Institutional ........................................... 1 1.2972 

4EB31 ........... MS Rehab—Medium ....................................... Late—Institutional ........................................... 2 1.4581 

4EC11 ........... MS Rehab—High ............................................ Late—Institutional ........................................... 0 1.3784 

4EC21 ........... MS Rehab—High ............................................ Late—Institutional ........................................... 1 1.4373 

4EC31 ........... MS Rehab—High ............................................ Late—Institutional ........................................... 2 1.5982 

4FA11 ........... Behavioral Health—Low ................................. Late—Institutional ........................................... 0 0.9484 

4FA21 ........... Behavioral Health—Low ................................. Late—Institutional ........................................... 1 1.0073 

4FA31 ........... Behavioral Health—Low ................................. Late—Institutional ........................................... 2 1.1682 

4FB11 ........... Behavioral Health—Medium ........................... Late—Institutional ........................................... 0 1.1307 

4FB21 ........... Behavioral Health—Medium ........................... Late—Institutional ........................................... 1 1.1895 

4FB31 ........... Behavioral Health—Medium ........................... Late—Institutional ........................................... 2 1.3505 

4FC11 ........... Behavioral Health—High ................................. Late—Institutional ........................................... 0 1.2199 

4FC21 ........... Behavioral Health—High ................................. Late—Institutional ........................................... 1 1.2787 

4FC31 ........... Behavioral Health—High ................................. Late—Institutional ........................................... 2 1.4397 

Source: CY 2017 Medicare claims data for episodes ending on or before December 31, 2017 for which we had a linked OASIS assessment. 

LUPA episodes, outlier episodes, and episodes with PEP adjustments were excluded. 

In conjunction with the 

implementation of the PDGM, we are 

proposing to revise the frequency with 

which we update the HH PPS Grouper 

software used to assign the appropriate 

HIPPS code used for case-mix 

adjustment onto the claim. Since CY 

2004 when the HH PPS moved from a 

fiscal year to a calendar year basis, we 

have updated the Grouper software 

twice a year. We provide an updated 

version of the Grouper software effective 

every October 1 in order to address ICD 

coding revisions, which are effective on 

October 1. We also provide an updated 

version of the HH PPS Grouper software 

effective on January 1 in order to 

capture the new or revised HH PPS 

policies that become effective on 

January 1. In an effort to reduce 

provider burden associated with testing 

and installing two software releases, we 

propose to discontinue the October 

release of the HH PPS Grouper software 

and provide a single HH PPS Grouper 

software release effective January 1 of 

each calendar year. We propose that the 

January release of the HH PPS Grouper 

software would include the most recent 

revisions to the ICD coding system as 

well as the payment policy updates 

contained in the HH PPS final rule. 

Therefore, under this proposal, during 

the last quarter of each calendar year, 

HHAs would continue to use the ICD– 

10–CM codes and reporting guidelines 

that they would have used for the first 

three calendar quarters. HHAs would 

begin using the most recent ICD–10–CM 

codes and reporting guidelines on home 

health claims beginning on January 1 of 

each calendar year. We are soliciting 

comments on this proposal. 

We invite comments on the proposed 

PDGM case-mix weights, case-mix 


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weight methodology and proposed 

annual recalibration of the case-mix 

weights, updates to the HH PPS Grouper 

software, and the associated regulations 

text changes in section III.F.13 of this 

proposed rule. 

11. Low-Utilization Payment 

Adjustment (LUPA) Add-On Payments 

and Partial Payment Adjustments Under 

PDGM 

LUPA episodes qualify for an add-on 

payment in the case that the established 

episode is the first or only episode in a 

sequence of adjacent episodes. As stated 

in the CY 2008 HH PPS final rule, LUPA 

add-on payments are made because the 

national per-visit payment rates do not 

adequately account for the front-loading 

of costs for the first episode of care as 

the average visit lengths in these initial 

LUPAs are 16 to 18 percent higher than 

the average visit lengths in initial nonLUPA episodes (72 FR 49848). LUPA 

episodes that occur as the only episode 

or as an initial episode in a sequence of 

adjacent episodes are adjusted by 

applying an additional amount to the 

LUPA payment before adjusting for area 

wage differences. Under the PDGM, we 

propose that the LUPA add-on factors 

will remain the same as the current 

payment system, described in section 

III.C.4 of this proposed rule. We 

multiply the per-visit payment amount 

for the first SN, PT, or SLP visit in 

LUPA episodes that occur as the only 

episode or an initial episode in a 

sequence of adjacent episodes by the 

appropriate factor (1.8451 for SN, 

1.6700 for PT, and 1.6266 for SLP) to 

determine the LUPA add-on payment 

amount. 

The current partial episode payment 

(PEP) adjustment is a proportion of the 

episode payment and is based on the 

span of days including the start-of-care 

date (for example, the date of the first 

billable service) through and including 

the last billable service date under the 

original plan of care before the 

intervening event in a home health 

beneficiary’s care defined as: 

• A beneficiary elected transfer, or 

• A discharge and return to home 

health that would warrant, for purposes 

of payment, a new OASIS assessment, 

physician certification of eligibility, and 

a new plan of care. 

We received comments on eliminating 

PEPs in response to the CY 2018 HH 

PPS proposed rule. We note that the 

change in the unit of payment from 60 

days to 30 days will reduce the number 

of instances where a PEP adjustment 

occurs. However, we believe 

maintaining a PEP adjustment policy is 

appropriate to ensure that Medicare is 

not paying twice for the same period of 

care, as the PEP is involved with patient 

transfers there is a risk of a duplicate 

payment error. For example, if a patient 

chooses to transfer to a different HHA 

during the course of a home health 

period of care, the payment is 

proportionally adjusted to reflect the 

length of time the beneficiary remained 

under the agency’s care prior to the 

intervening event and ensures that 

Medicare is not paying two HHAs for 

the same 30-day period of care. 

In summary for 30-day periods of 

care, we propose that the process for 

partial payment adjustments would 

remain the same as the existing policies 

pertaining to partial episode payments. 

When a new 30-day period begins due 

to the intervening event of the 

beneficiary elected transfer or discharge 

and return to home health during the 

30-day episode, the original 30-day 

period would be proportionally adjusted 

to reflect the length of time the 

beneficiary remained under the agency’s 

care prior to the intervening event. The 

proportional payment is the partial 

payment adjustment. The partial 

payment adjustment is calculated by 

using the span of days (first billable 

service date through and including the 

last billable service date) under the 

original plan of care as a proportion of 

30. The proportion is multiplied by the 

original case-mix and wage index 30- 

day payment. 

12. Payments for High-Cost Outliers 

Under the PDGM 

As described in section III.E of this 

proposed rule, section 1895(b)(5) of the 

Act allows for the provision of an 

addition or adjustment to the home 

health payment amount in the case of 

outliers because of unusual variations in 

the type or amount of medically 

necessary care. The history of and 

current methodology for payment of 

high-cost outliers under the HH PPS is 

described in detail in section III.E of this 

proposed rule. In the CY 2018 HH PPS 

proposed rule (82 FR 35270), we 

proposed that we would maintain the 

current methodology for payment of 

high-cost outliers upon implementation 

of a 30-day unit of payment and that we 

would calculate payment for high-cost 

outliers based upon 30-day periods of 

care. 

Commenters expressed concerns 

regarding the outlier policy proposed in 

the CY 2018 HH PPS proposed rule and 

the potential for more providers to 

exceed the 10 percent outlier cap under 

a 30-day period of care. Commenters 

also suggested modification to the 8- 

hour cap on the amount of time per day 

that is permitted to be counted toward 

the estimation of an episode’s costs for 

outlier calculation purposes. 

While we appreciate commenters’ 

feedback regarding the proposed outlier 

payment policy described in the CY 

2018 HH PPS proposed rule, we are 

proposing to maintain the existing 

outlier policy under the proposed 

PDGM, except that outlier payments 

would be determined on a 30-day basis 

to align with the 30-day unit of payment 

under the proposed PDGM. We believe 

that maintaining the existing outlier 

policy and applying such policy to 30- 

day periods of care would ensure a 

smooth transition within the framework 

of the proposed PDGM. We plan to 

closely evaluate and model projected 

outlier payments within the framework 

of the PDGM and consider 

modifications to the outlier policy as 

appropriate. The requirement that the 

total amount of outlier payments not 

exceed 2.5 percent of total home health 

payments as well as the 10 percent cap 

on outlier payments at the home health 

agency level are statutory requirements, 

as described in section 1895(b)(5) of the 

Act. Therefore, we do not have the 

authority to adjust or eliminate the 10- 

percent cap or increase the 2.5 percent 

maximum outlier payment amount. 

Regarding the 8-hour limit on the 

amount of time per day counted toward 

the estimation of an episode’s costs, as 

noted in the CY2017 HH PPS final rule 

(81 FR 76729), where a patient is 

eligible for coverage of home health 

services, Medicare statute limits the 

amount of part-time or intermittent 

home health aide services and skilled 

nursing services covered during a home 

health episode. Section 1861(m)(7)(B) of 

the Act states that the term ‘‘ ‘part-time 

or intermittent services’ means skilled 

nursing and home health aide services 

furnished any number of days per week 

as long as they are furnished (combined) 

less than 8 hours each day and 28 or 

fewer hours each week (or, subject to 

review on a case-by-case basis as to the 

need for care, less than 8 hours each day 

and 35 or fewer hours per week).’’ 

Therefore, the daily and weekly cap on 

the amount of skilled nursing and home 

health aide services combined is a limit 

defined within the statute. As we 

further noted in the CY 2018 HH PPS 

final rule (81 FR 76729), because outlier 

payments are predominately driven by 

the provision of skilled nursing services, 

the 8-hour daily cap on services aligns 

with the statute, which requires that 

skilled nursing and home health aide 

services combined be furnished less 

than 8 hours each day. Therefore, we 

believe that maintaining the 8-hour per 

day cap is appropriate under the 

proposed PDGM. 


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Simulating payments using 

preliminary CY 2017 claims data and 

the CY 2019 payment rates, we estimate 

that outlier payments under the 

proposed PDGM with 30-day periods of 

care would comprise approximately 

4.77 percent of total HH PPS payments 

in CY 2019. Given the statutory 

requirement to target up to, but no more 

than, 2.5 percent of total payments as 

outlier payments, we currently estimate 

that the FDL ratio under the proposed 

PDGM would need to change from 0.55 

to 0.71. However, given the proposed 

implementation of the PDGM for 30-day 

periods of care beginning on or after 

January 1, 2020, we will update our 

estimate of outlier payments as a 

percent of total HH PPS payments using 

the most current and complete 

utilization data available at the time of 

CY 2020 rate-setting. 

We invite public comments on 

maintaining the current outlier payment 

methodology outlined in section III.E of 

this proposed rule for the proposed 

PDGM and the associated changes in the 

regulations text as described in section 

III.F.13 of this proposed rule. 

13. Conforming Regulations Text 

Revisions for the Implementation of the 

PDGM in CY 2020 

We are proposing to make a number 

of revisions to the regulations to 

implement the PDGM for episodes 

beginning on or after January 1, 2020, as 

outlined in sections III.F.1 through 

III.F.12 of this proposed rule. We 

propose to make conforming changes in 

§ 409.43 and part 484 Subpart E to 

revise the unit of service from a 60-day 

episode to a 30-day period. In addition, 

we are proposing to restructure 

§ 484.205. These revisions would be 

effective on January 1, 2020. 

Specifically, we propose to: 

• Revise § 409.43, which outlines 

plan of care requirements. We propose 

to revise several paragraphs to phase out 

the unit of service from a 60-day 

episode for claims beginning on or 

before December 31, 2019, and to 

implement a 30-day period as the new 

unit of service for claims beginning on 

or after January 1, 2020 under the 

PDGM. We propose to move and revise 

paragraph (c)(2) to § 484.205 as 

paragraph (c)(2) aligns more closely 

with the regulations addressing the 

basis of payment. 

• Revise the definitions of rural area 

and urban area in § 484.202 to remove 

‘‘with respect to home health episodes 

ending on or after January 1, 2006’’ from 

each definition as this verbiage is no 

longer necessary. 

• Restructure § 484.205 to provide 

more logical organization and revise to 

account for the change in the unit of 

payment under the HH PPS for CY 2020. 

The PDGM uses 30-day periods rather 

than the 60-day episode used in the 

current payment system. Therefore, we 

propose to revise § 484.205 to remove 

references to ‘‘60-day episode’’ and to 

refer more generally to the ‘‘national, 

standardized prospective payment’’. We 

are also proposing revisions to § 484.205 

as follows: 

++ Add paragraphs to paragraph (b) 

to define the unit of payment. 

++ Move language which addresses 

the requirement for OASIS submission 

from § 484.210 and insert it into 

§ 484.205 as new paragraph (c). 

++ Move paragraph (c)(2) from 

§ 409.43 to § 484.205 as new paragraph 

(g) in order to better align with the 

regulations detailing the basis of 

payment. 

++ Add paragraph (h) to discuss split 

percentage payments under the current 

model and the proposed PDGM. 

We are not proposing to change the 

requirements or policies relating to 

durable medical equipment or 

furnishing negative pressure wound 

therapy using a disposable device. 

• Remove § 484.210 which discusses 

data used for the calculation of the 

national prospective 60-day episode 

payment as we believe that this 

information is duplicative and already 

incorporated in other sections of part 

484, subpart E. 

• Revise the section heading of 

§ 484.215 from ‘‘Initial establishment of 

the calculation of the national 60-day 

episode payment’’ to ‘‘Initial 

establishment of the calculation of the 

national, standardized prospective 60- 

day episode payment and 30-day 

payment rates.’’ Also, we propose to add 

paragraph (f) to this section to describe 

how the national, standardized 

prospective 60-day episode payment 

rate is converted into a national, 

standardized prospective 30-day period 

payment and when it applies. 

• Revise the section heading of 

§ 484.220 from ‘‘Calculation of the 

adjusted national prospective 60-day 

episode payment rate for case-mix and 

area wage levels’’ to ‘‘Calculation of the 

case-mix and wage area adjusted 

prospective payment rates.’’ We propose 

to remove the reference to ‘‘national 60- 

day episode payment rate’’ and replace 

it with ‘‘national, standardized 

prospective payment’’. 

• Revise the section heading in 

§ 484.225 from ‘‘Annual update of the 

unadjusted national prospective 60-day 

episode payment rate’’ to ‘‘Annual 

update of the unadjusted national, 

standardized prospective 60-day 

episode and 30-day payment rates’’. 

Also, we propose to revise § 484.225 to 

remove references to ‘‘60-day episode’’ 

and to refer more generally to the 

‘‘national, standardized prospective 

payment’’. In addition, we propose to 

add paragraph (d) to describe the annual 

update for CY 2020 and subsequent 

calendar years. 

• Revise the section heading of 

§ 484.230 from ‘‘Methodology used for 

the calculation of low-utilization 

payment adjustment’’ to ‘‘Low 

utilization payment adjustment’’. Also, 

we propose to designate the current text 

to paragraph (a) and insert language 

such that proposed paragraph (a) 

applies to claims beginning on or before 

December 31, 2019, using the current 

payment system. We propose to add 

paragraph (b) to describe how low 

utilization payment adjustments are 

determined for claims beginning on or 

after January 1, 2020, using the 

proposed PDGM. 

• Revise the section heading of 

§ 484.235 from ‘‘Methodology used for 

the calculation of partial episode 

payment adjustments’’ to ‘‘Partial 

payment adjustments’’. We propose to 

remove paragraphs (a), (b), and (c). We 

propose to remove paragraphs (1), (2), 

and (3) which describe partial payment 

adjustments from paragraph (d) in 

§ 484.205 and incorporate them into 

§ 484.235. We propose to add paragraph 

(a) to describe partial payment 

adjustments under the current system, 

that is, for claims beginning on or before 

December 31, 2019, and paragraph (b) to 

describe partial payment adjustments 

under the proposed PDGM, that is, for 

claims beginning on or after January 1, 

2020. 

• Revise the section heading for 

§ 484.240 from ‘‘Methodology used for 

the calculation of the outlier payment’’ 

to ‘‘Outlier payments.’’ In addition, we 

propose to remove language at 

paragraph (b) and append it to 

paragraph (a). We propose to add 

language to proposed revised paragraph 

(a) such that paragraph (a) will apply to 

payments under the current system, that 

is, for claims beginning on or before 

December 31, 2019. We propose to 

revise paragraph (b) to describe 

payments under the proposed PDGM, 

that is, for claims beginning on or after 

January 1, 2020. In paragraph (c), we 

propose to replace the ‘‘estimated’’ cost 

with ‘‘imputed’’ cost. Lastly, we propose 

to revise paragraph (d) to reflect the per15 minute unit approach to imputing 

the cost for each claim. 

We are soliciting comments on the 

proposed PDGM as outlined in sections 

III.F.1 through III.F.12 and the 

associated regulations text changes 


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51https://www.cms.gov/Regulations-andGuidance/Guidance/Manuals/Downloads/ 

bp102c07.pdf and https://www.cms.gov/ 

Regulations-and-Guidance/Guidance/Manuals/ 

Downloads/pim83c06.pdf. 

described above and in section IX of this 

proposed rule. 

G. Proposed Changes Regarding 

Certifying and Recertifying Patient 

Eligibility for Medicare Home Health 

Services 

1. Background 

Sections 1814(a) and 1835(a) of the 

Act require that a physician certify 

patient eligibility for home health 

services (and recertify, where such 

services are furnished over a period of 

time). The certifying physician is 

responsible for determining whether the 

patient meets the eligibility criteria (that 

is, homebound status and need for 

skilled services) and for understanding 

the current clinical needs of the patient 

such that the physician can establish an 

effective plan of care. In addition, as a 

condition for payment, section 6407 of 

the Affordable Care Act amended 

sections 1814(a)(2)(C) and 1835(a)(2)(A) 

of the Act requiring, as part of the 

certification for home health services, 

that prior to certifying a patient’s 

eligibility for the Medicare home health 

benefit the certifying physician must 

document that the physician himself or 

herself or an allowed non-physician 

practitioner had a face-to-face encounter 

with the patient. The regulations at 42 

CFR 424.22(a) and (b) set forth the 

requirements for certification and 

recertification of eligibility for home 

health services. The regulations at 

§ 424.22(c) provide the supporting 

documentation requirements used as the 

basis for determining patient eligibility 

for Medicare home health services. 

2. Current Supporting Documentation 

Requirements 

In determining whether the patient is 

or was eligible to receive services under 

the Medicare home health benefit at the 

start of care, as of January 1, 2015, we 

require documentation in the certifying 

physician’s medical records and/or the 

acute/post-acute care facility’s medical 

records (if the patient was directly 

admitted to home health) to be used as 

the basis for certification of home health 

eligibility as described at § 424.22(c). 

Specifically, the certifying physician 

and/or the acute/post-acute care facility 

medical record (if the patient was 

directly admitted to home health) for 

the patient must contain information 

that justifies the referral for Medicare 

home health services. This includes 

documentation that substantiates the 

patient’s: 

• Need for the skilled services; and 

• Homebound status; 

Likewise, the certifying physician 

and/or the acute/post-acute care facility 

medical record (if the patient was 

directly admitted to home health) for 

the patient must contain the actual 

clinical note for the face-to-face 

encounter visit that demonstrates that 

the encounter: 

• Occurred within the required 

timeframe, 

• Was related to the primary reason 

the patient requires home health 

services; and 

• Was performed by an allowed 

provider type. 

This information can be found most 

often in clinical and progress notes and 

discharge summaries. While the face-toface encounter must be related to the 

primary reason for home health 

services, the patient’s skilled need and 

homebound status can be substantiated 

through an examination of all submitted 

medical record documentation from the 

certifying physician, acute/post-acute 

care facility, and/or HHA (if certain 

requirements are met). The synthesis of 

progress notes, diagnostic findings, 

medications, and nursing notes, help to 

create a longitudinal clinical picture of 

the patient’s health status to make the 

determination that the patient is eligible 

for home health services. HHAs must 

obtain as much documentation from the 

certifying physician’s medical records 

and/or the acute/post-acute care 

facility’s medical records (if the patient 

was directly admitted to home health) 

as they deem necessary to assure 

themselves that the Medicare home 

health patient eligibility criteria have 

been met. HHAs must be able to provide 

it to CMS and its review entities upon 

request. If the documentation used as 

the basis for the certification of 

eligibility (that is, the certifying 

physician’s and/or the acute/post-acute 

care facility’s medical record 

documentation) is not sufficient to 

demonstrate that the patient is or was 

eligible to receive services under the 

Medicare home health benefit, payment 

will not be rendered for home health 

services provided. 

3. Proposed Regulations Text Changes 

Regarding Information Used to Satisfy 

Documentation of Medicare Eligibility 

for Home Health Services 

Section 51002 of the BBA of 2018 

amended sections 1814(a) and 1835(a) 

of the Act to provide that, effective for 

physician certifications and 

recertifications made on or after January 

1, 2019, in addition to using the 

documentation in the medical record of 

the certifying physician or of the acute 

or post-acute care facility (where home 

health services were furnished to an 

individual who was directly admitted to 

the HHA from such facility), the 

Secretary may use documentation in the 

medical record of the HHA as 

supporting material, as appropriate to 

the case involved. We believe the BBA 

of 2018 provisions are consistent with 

our existing policy in this area, which 

is currently reflected in sub-regulatory 

guidance in the Medicare Benefit Policy 

Manual (Pub.100–02, chapter 7, section 

30.5.1.2) and the Medicare Program 

Integrity Manual (Pub. 100–08, chapter 

6, section 6.2.3).51 The sub-regulatory 

guidance describes the circumstances in 

which HHA documentation can be used 

along with the certifying physician and/ 

or acute/post-acute care facility medical 

record to support the patient’s 

homebound status and skilled need. 

Specifically, we state that information 

from the HHA, such as the plan of care 

required in accordance with 42 CFR 

409.43 and the initial and/or 

comprehensive assessment of the 

patient required in accordance with 42 

CFR 484.55, can be incorporated into 

the certifying physician’s medical 

record for the patient and used to 

support the patient’s homebound status 

and need for skilled care. However, this 

information must be corroborated by 

other medical record entries in the 

certifying physician’s and/or the acute/ 

post-acute care facility’s medical record 

for the patient. This means that the 

appropriately incorporated HHA 

information, along with the certifying 

physician’s and/or the acute/post-acute 

care facility’s medical record, creates a 

clinically consistent picture that the 

patient is eligible for Medicare home 

health services. The certifying physician 

officially incorporates the HHA 

information into his/her medical record 

for the patient by signing and dating the 

material. Once incorporated, the 

documentation from the HHA, in 

conjunction with the certifying 

physician and/or acute/post-acute care 

facility documentation, must 

substantiate the patient’s eligibility for 

home health services. 

While we believe the provisions in 

section 51002 of the BBA of 2018 do not 

require a change to the current 

regulations because the provisions are 

consistent with existing CMS policy, we 

are discretionarily proposing to amend 

the regulations text at 42 CFR 424.22(c) 

to align the regulations text with current 

sub-regulatory guidance to allow 

medical record documentation from the 

HHA to be used to support the basis for 

certification and/or recertification of 


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32424 Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules 

home health eligibility, if the following 

requirements are met: 

• The documentation from the HHA 

can be corroborated by other medical 

record entries in the certifying 

physician’s and/or the acute/post-acute 

care facility’s medical record for the 

patient, thereby creating a clinically 

consistent picture that the patient is 

eligible for Medicare home health 

services as specified in § 424.22 (a)(1) 

and (b). 

• The certifying physician signs and 

dates the HHA documentation 

demonstrating that the documentation 

from the HHA was considered when 

certifying patient eligibility for 

Medicare home health services. HHA 

documentation can include, but is not 

limited to, the patient’s plan of care 

required in accordance with 42 CFR 

409.43 and the initial and/or 

comprehensive assessment of the 

patient required in accordance with 42 

CFR 484.55. 

We believe that this proposal 

incorporates existing sub-regulatory 

flexibilities into the regulations text that 

allow HHA medical record 

documentation to support the basis of 

home health eligibility. By 

incorporating the existing subregulatory guidance into regulation, 

HHAs are assured that HHA-generated 

documentation can be used as 

supporting material for the basis of 

home health eligibility, as long as all 

conditions are met, as described 

previously. HHAs have the discretion to 

determine the type and format of any 

documentation used to support home 

health eligibility. The expectation is that 

the HHA-generated supporting medical 

record documentation would be used to 

support the existing medical record of 

the certifying physician or the acute/ 

post-acute care facility to create a 

clinically consistent picture that the 

individual is confined to the home and 

requires skilled services. Anecdotally, 

we have received reports from HHAs 

that they typically include this 

supporting information on the plan of 

care. Generally, the certifying physician 

is also the physician who establishes the 

plan of care and the plan of care must 

be signed by the physician. 

Consequently, no additional burden is 

incurred by either the HHA or the 

certifying physician. As existing subregulatory guidance allows HHAgenerated documentation to be used as 

supporting material for the physician’s 

determination of eligibility for home 

health services, we expect that most 

HHAs already have a process in place to 

provide this information to the 

certifying physician or the acute/postacute care facility. We welcome 

comments on this assumption. 

We invite comments on this proposal 

to amend the regulations text at 

§ 424.22(c), which would codify 

subregulatory guidance allowing HHAgenerated medical record 

documentation to be used as supporting 

material to the certifying physician’s or 

the acute and/or post-acute care 

facility’s medical record documentation 

as part of the certification and/or 

recertification of eligibility for home 

health services, under certain 

circumstances. The corresponding 

proposed regulations text changes can 

be found in section VIII. of this 

proposed rule. 

4. Proposed Elimination of 

Recertification Requirement To Estimate 

How Much Longer Home Health 

Services Will Be Required 

In the CY 2018 HH PPS proposed rule 

(82 FR 35378), we invited public 

comments about improvements that can 

be made to the health care delivery 

system that reduce unnecessary burdens 

for clinicians, other providers, and 

patients and their families. Specifically, 

we asked the public to submit their 

ideas for regulatory, sub-regulatory, 

policy, practice, and procedural changes 

to reduce burdens for hospitals, 

physicians, and patients, improve the 

quality of care, decrease costs, and 

ensure that patients and their providers 

and physicians are making the best 

health care choices possible. We 

specifically stated that CMS would not 

respond to the comment submissions in 

the final rule. Instead, we would review 

the comments submitted in response to 

the requests for information and actively 

consider them as we develop future 

regulatory proposals or future subregulatory policy guidance. 

Several commenters requested that 

CMS consider eliminating the 

requirement that the certifying 

physician include an estimate of how 

much longer skilled services will be 

required at each home health 

recertification, as set forth at 

§ 424.22(b)(2) and in sub-regulatory 

guidance in the Medicare Benefit Policy 

Manual (Chapter 7, Section 30.5.2). 

Commenters stated that this estimate is 

duplicative of the Home Health 

Conditions of Participation (CoP) 

requirements for the content of the 

home health plan of care, set out at 42 

CFR 484.60(a)(2). 

The Home Health CoP at 

§ 484.60(a)(2) sets forth the 

requirements for the content of the 

home health plan of care, which 

includes the types of services, supplies, 

and equipment required, as well as, the 

frequency and duration of visits to be 

made. Commenters stated that the plan 

of care requirement already includes the 

frequency and duration of visits to be 

made and is an estimate of how much 

longer home health services are 

expected to be required by the patient. 

They observed that including this 

information as part of the recertification 

statement is duplicative and 

unnecessary. Commenters went on to 

say that because the certifying physician 

must review, sign and date the plan of 

care at least every 60-days, he/she is 

attesting to how much longer he/she 

thinks the patient will require home 

health services. Commenters also stated 

that this estimate appears to have no 

value to the patient, the physician, the 

HHA, or to CMS, but failure to include 

the physician’s estimate of how much 

longer skilled care will be required can 

result in claim denials. 

We have determined that the estimate 

of how much longer skilled care will be 

required at each recertification is not 

currently used for quality, payment, or 

program integrity purposes. Given this 

consideration and the Home Health CoP 

requirements for the content of the 

home health plan of care, and to 

mitigate any potential denials of home 

health claims that otherwise would 

meet all other Medicare requirements, 

we are proposing to eliminate the 

regulatory requirement as set forth at 42 

CFR 424.22(b)(2), that the certifying 

physician, as part of the recertification 

process, provide an estimate of how 

much longer skilled services will be 

required. All other recertification 

content requirements under 

§ 424.22(b)(2) would remain unchanged. 

We believe the elimination of this 

recertification requirement would result 

in a reduction of burden for certifying 

physicians by reducing the amount of 

time physicians spend on the 

recertification process and would result 

in an overall cost savings of $14.2 

million. We provided a more detailed 

description of this burden reduction in 

section VIII.C.1.c. of this proposed rule. 

We invite comments regarding the 

proposed elimination of the requirement 

that the certifying physician include an 

estimate of how much longer skilled 

services will be required at each home 

health recertification, as well as the 

corresponding regulations text changes 

at § 424.22(b)(2). 

While we are not proposing any 

additional changes to the home health 

payment regulations in this proposed 

rule as suggested by commenters in the 

RFI, we will continue to consider 

whether future regulatory or subregulatory changes are warranted to 

reduce unnecessary burden. We thank 


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52http://www.cchpca.org/remote-patientmonitoring. 

53Rojhan, K., Laplante, S., Sloand, J., Main, C., 

Ibrahim, A., Wild, J., Sturt, N. Remote Monitoring 

of Chronic Diseases: A Landscape Assessment of 

Policies in Four European Countries (2016) PLOS 

One. V11 (5) https://dx.doi.org/10.1371%2Fjour

nal.pone.0155738. 

54Broad, J., Davis, C., Bender, M., Smith, T. 

(2014) Feasibility and Acute Care Utilization 

Outcomes of a Post-Acute Transitional 

Telemonitoring Program for Underserved Chronic 

Disease Patients. Journal of Cardiac Failure. Vol 20 

(8S) S116. http://dx.doi.org/10.1016/j.cardfail.2

014.06.328. 

55 Department of Health and Human Services, 

Agency for Healthcare Research and Quality, 

Telehealth: Mapping the Evidence for Patient 

Outcomes from Systematic Reviews, Technical 

Brief Number 26 (Washington, DC: June 2016). 

the commenters for taking the time to 

convey their thoughts and suggestions 

on this initiative. 

H. Proposed Change Regarding Remote 

Patient Monitoring Under the Medicare 

Home Health Benefit 

Section 4012 of the 21st Century 

Cures Act directed the Centers for 

Medicare & Medicaid Services (CMS) to 

provide information on the current use 

of and/or barriers to telehealth services. 

This directive, along with advancements 

in technology, prompted us to examine 

ways in which HHAs can integrate 

telehealth and/or remote patient 

monitoring into the care planning 

process. Telehealth services, under 

section 1834(m)(4) of the Act, include 

services such as professional 

consultations, office visits, 

pharmacologic management, and office 

psychiatry services furnished via a 

telecommunications system by a distant 

site physician or practitioner to a 

patient located at a designated 

‘‘originating site.’’ Originating sites, as 

defined under section 1834(m)(4)(C) of 

the Act, generally must be certain kinds 

of healthcare settings located in certain 

geographic areas. This definition 

generally does not include the 

beneficiary’s home. As a Medicare 

condition for payment, an interactive 

telecommunications system generally is 

required when furnishing telehealth 

services. Medicare defines ‘‘interactive 

telecommunication systems’’ as audio 

and video equipment permitting twoway, real-time interactive 

communication between the patient and 

distant site physician or practitioner (42 

CFR 410.78). Telehealth services are 

used to substitute for professional inperson visits when certain eligibility 

criteria are met. For patients receiving 

care under the Medicare home health 

benefit, section 1895(e)(1)(A) of the Act 

prohibits payment for services furnished 

via a telecommunications system if such 

services substitute for in-person home 

health services ordered as part of a plan 

of care certified by a physician. 

However, the statute does not define the 

term ‘‘telecommunications system’’ as it 

relates to the provision of home health 

care and explicitly notes that an HHA is 

not prevented from providing services 

via a telecommunications system, 

assuming the service is not considered 

a home health visit for purposes of 

eligibility or payment. 

Remote patient monitoring, while a 

service using a form of 

telecommunications, is not considered a 

Medicare telehealth service as defined 

under section 1834(m) of the Act, but 

rather uses ‘‘digital technologies to 

collect medical and other forms of 

health data from individuals in one 

location and electronically transmit that 

information securely to health care 

providers in a different location for 

assessment and recommendations.’’ 52

For example, remote patient monitoring 

allows the patient to collect and 

transmit his or her own clinical data, 

such as weight, blood pressure, and 

heart rate for monitoring and analysis. 

The clinical data is monitored without 

a direct interaction between the 

practitioner and beneficiary, and then 

reviewed by the HHA for potential 

consultation with the certifying 

physician for changes in the plan of 

care. Additionally, because remote 

patient monitoring is not statutorily 

considered a telehealth service, it would 

not be subject to the restrictions on 

originating site and interactive 

telecommunications systems 

technology. 

We believe remote patient monitoring 

could be beneficial in augmenting the 

home health services outlined in the 

patient’s plan of care, without 

replicating or replacing home health 

visits. The plan of care, in accordance 

with the home health conditions of 

participation (CoPs), must identify 

patient-specific measurable outcomes 

and goals, and be established, 

periodically reviewed, and signed by a 

physician (42 CFR 484.60(a)). The HHA 

must also promptly alert the relevant 

physician(s) to any changes in the 

patient’s condition or needs that suggest 

that outcomes are not being achieved, or 

that the plan of care must be altered (42 

CFR 484.60(c)). Remote patient 

monitoring could enable the HHA to 

more quickly identify any changes in 

the patient’s clinical condition, as well 

as monitor patient compliance, 

prompting physician review of, and 

potential changes to, the plan of care, as 

required per the CoPs. Particularly in 

cases where the home health patient is 

admitted for skilled observation and 

assessment of the patient’s condition 

due to a reasonable potential for 

complications or an acute episode, 

remote patient monitoring could 

augment home health visits until the 

patient’s clinical condition stabilized. 

Fluctuating or abnormal vital signs 

could be monitored between visits, 

potentially leading to quicker 

interventions and updates to the 

treatment plan. 

A review of the literature shows that 

utilizing remote patient monitoring in 

chronic disease management has the 

potential to ‘‘significantly improve an 

individual’s quality of life, allowing 

patients to maintain independence, 

prevent complications, and minimize 

costs.’’ 53 Specifically for patients with 

chronic obstructive pulmonary disease 

(COPD) and congestive heart failure 

(CHF), research indicates that remote 

patient monitoring has been successful 

in reducing readmissions and long-term 

acute care utilization.54 Likewise, a 

systematic review of evidence collected 

by the Agency for Healthcare Research 

and Quality (AHRQ) revealed that 

remote patient monitoring of chronic 

cardiac and respiratory conditions 

resulted in lower mortality, improved 

quality of life, and reductions in 

hospital admissions.55 If changes in 

condition are identified early through 

careful monitoring, serious 

complications may be avoided, 

potentially preventing emergency 

department visits and hospital 

admissions. Surveillance and case 

management are frequently occurring 

interventions in home health, and 

remote patient monitoring leverages 

technology to encourage patient 

involvement and accountability in order 

to improve care coordination. 

Anecdotally, we have heard from 

various home health agencies regarding 

integration of remote patient monitoring 

into the care planning process. For 

example, on a recent site visit to a home 

health agency, CMS participated in a 

care coordination meeting, which 

included a discussion of the agency’s 

experience implementing remote patient 

monitoring in home health episodes. 

Certain patients with chronic conditions 

received tablets pre-loaded with 

software enabling patients to take and 

transmit their vital signs on a daily 

basis. The transmitted health data was 

then monitored and analyzed by an 

outside service, which contacted the 

HHA with any changes or abnormalities. 

This example highlights how remote 

patient monitoring could be integrated 

into the home health episode of care. 

Additionally, we believe that the 

growth of technology and new software 

development could be used in the 


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provision of care and care coordination 

in the home, as well as empower 

patients to be active participants in their 

disease management. Other than the 

statutory requirement that services 

furnished via a telecommunications 

system may not substitute for in-person 

home health services ordered as part of 

a plan of care certified by a physician, 

we do not have specific policies 

surrounding the use of remote patient 

monitoring by HHAs. We anticipate that 

HHAs would follow clinical and 

manufacturer guidelines when 

implementing the technology into 

clinical practice, while still meeting all 

statutory requirements, conditions for 

payment, and the home health 

conditions of participation. 

Medicare began making separate 

payment in CY 2018 for CPT code 99091 

that allows physicians and other 

healthcare professionals to bill for the 

collection and interpretation of 

physiologic data digitally stored and/or 

transmitted by the patient and/or 

caregiver to the physician or other 

qualified health care professional (82 

CFR 53013). CPT code 99091 is paid 

under the Medicare physician fee 

schedule, and thus cannot be billed by 

HHAs. Additionally, it includes the 

interpretation of the physiologic data, 

whereas the HHA would only be 

responsible for the collection of the 

data. However, with this distinction, we 

feel the code’s description accurately 

describes remote monitoring services. 

Therefore, we propose to define remote 

patient monitoring under the Medicare 

home health benefit as ‘‘the collection of 

physiologic data (for example, ECG, 

blood pressure, glucose monitoring) 

digitally stored and/or transmitted by 

the patient and/or caregiver to the 

HHA.’’ 

Although the cost of remote patient 

monitoring is not separately billable 

under the HH PPS and may not be used 

as a substitute for in-person home 

health services, there is nothing to 

preclude HHAs from using remote 

patient monitoring to augment the care 

planning process as appropriate. As 

such, we believe the expenses of remote 

patient monitoring, if used by the HHA 

to augment the care planning process, 

must be reported on the cost report as 

allowable administrative costs (that is, 

operating expenses) that are factored 

into the costs per visit. Currently, costs 

associated with remote patient 

monitoring are reported on line 23.20 on 

Worksheet A, as direct costs associated 

with telemedicine. For 2016, 

approximately 3 percent of HHAs 

reported telemedicine costs that 

accounted for roughly 1 percent of their 

total agency costs on the HHA cost 

report. However, these costs are not 

allocated to the costs per visit. We 

propose to amend the regulations at 42 

CFR 409.46 to include the costs of 

remote patient monitoring as an 

allowable administrative cost (that is, 

operating expense), if remote patient 

monitoring is used by the HHA to 

augment the care planning process. This 

would allow HHAs to report the costs of 

remote patient monitoring on the HHA 

cost report as part of their operating 

expenses. These costs would then be 

factored into the costs per visit. 

Factoring the costs associated with 

remote patient monitoring into the costs 

per visit has important implications for 

assessing home health costs relevant to 

payment, including HHA Medicare 

margin calculations. We are soliciting 

comments on the proposed definition of 

remote patient monitoring under the HH 

PPS to describe telecommunication 

services used to augment the plan of 

care during a home health episode. 

Additionally, we welcome comments 

regarding additional utilization of 

telecommunications technologies for 

consideration in future rulemaking. We 

are also soliciting comments on the 

proposed changes to the regulations at 

42 CFR 409.46, to include the costs of 

remote patient monitoring as allowable 

administrative costs (that is, operating 

expenses), as detailed in section IX. of 

this proposed rule. 

IV. Home Health Value-Based 

Purchasing (HHVBP) Model 

A. Background 

As authorized by section 1115A of the 

Act and finalized in the CY 2016 HH 

PPS final rule (80 FR 68624), we began 

testing the HHVBP Model on January 1, 

2016. The HHVBP Model has an overall 

purpose of improving the quality and 

delivery of home health care services to 

Medicare beneficiaries. The specific 

goals of the Model are to: (1) Provide 

incentives for better quality care with 

greater efficiency; (2) study new 

potential quality and efficiency 

measures for appropriateness in the 

home health setting; and (3) enhance the 

current public reporting process. 

Using the randomized selection 

methodology finalized in the CY 2016 

HH PPS final rule, we selected nine 

states for inclusion in the HHVBP 

Model, representing each geographic 

area across the nation. All Medicarecertified Home Health Agencies (HHAs) 

providing services in Arizona, Florida, 

Iowa, Maryland, Massachusetts, 

Nebraska, North Carolina, Tennessee, 

and Washington (competing HHAs) are 

required to compete in the Model. 

Requiring all Medicare-certified HHAs 

providing services in the selected states 

to participate in the Model ensures that: 

(1) There is no selection bias; (2) 

participating HHAs are representative of 

HHAs nationally; and, (3) there is 

sufficient participation to generate 

meaningful results. 

As finalized in the CY 2016 HH PPS 

final rule, the HHVBP Model uses the 

waiver authority under section 

1115A(d)(1) of the Act to adjust 

Medicare payment rates under section 

1895(b) of the Act beginning in CY 2018 

based on the competing HHAs’ 

performance on applicable measures. 

Payment adjustments will be increased 

incrementally over the course of the 

HHVBP Model in the following manner: 

(1) A maximum payment adjustment of 

3 percent (upward or downward) in CY 

2018; (2) a maximum payment 

adjustment of 5 percent (upward or 

downward) in CY 2019; (3) a maximum 

payment adjustment of 6 percent 

(upward or downward) in CY 2020; (4) 

a maximum payment adjustment of 7 

percent (upward or downward) in CY 

2021; and (5) a maximum payment 

adjustment of 8 percent (upward or 

downward) in CY 2022. Payment 

adjustments are based on each HHA’s 

Total Performance Score (TPS) in a 

given performance year (PY) comprised 

of: (1) A set of measures already 

reported via the Outcome and 

Assessment Information Set (OASIS) 

and completed Home Health Consumer 

Assessment of Healthcare Providers and 

Systems (HHCAHPS) surveys for all 

patients serviced by the HHA and select 

claims data elements; and (2) three New 

Measures for which points are achieved 

for reporting data. 

For CY 2019, we are proposing to 

remove five measures and add two new 

proposed composite measures to the 

applicable measure set for the HHVBP 

model, revise our weighting 

methodology for the measures, and 

rescore the maximum number of 

improvement points. 

B. Quality Measures 

1. Proposal To Remove Two OASISBased Measures Beginning With 

Performance Year 4 (CY 2019) 

In the CY 2016 HH PPS final rule, we 

finalized a set of quality measures in 

Figure 4a: Final PY1 Measures and 

Figure 4b: Final PY1 New Measures (80 

FR 68671 through 68673) for the 

HHVBP Model used in PY1, referred to 

as the starter set. We also stated that this 

set of measures will be subject to change 

or retirement during subsequent model 

years and revised through the 

rulemaking process (80 FR 68669). 


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56 2015 Annual Report to Congress, http://

www.ahrq.gov/workingforquality/reports/annualreports/nqs2015annlrpt.htm. 

57The Advisory Committee on Immunization 

Practices was established under Section 222 of the 

Public Health Service Act (42 U.S.C. 217a), as 

amended, to assist states and their political 

subdivisions in the prevention and control of 

communicable diseases; to advise the states on 

matters relating to the preservation and 

improvement of the public’s health; and to make 

grants to states and, in consultation with the state 

health authorities, to agencies and political 

subdivisions of states to assist in meeting the costs 

of communicable disease control programs. (Charter 

of the Advisory Committee on Immunization 

Practices, filed April 1, 2018. https://www.cdc.gov/ 

vaccines/acip/committee/ACIP-Charter-2018.pdf). 

58Prevention of Pneumococcal Disease: 

Recommendations of the Advisory Committee on 

Immunization Practices (ACIP), MMWR 1997;46:1– 

24. 

59Tomczyk S, Bennett NM, Stoecker C, et al. Use 

of 13-valent pneumococcal conjugate vaccine and 

23-valent pneumococcal polysaccharide vaccine 

among adults aged ≥65 years: Recommendations of 

the Advisory Committee on Immunization Practices 

(ACIP). MMWR 2014; 63: 822–5. 

The measures were selected for the 

Model using the following guiding 

principles: (1) Use a broad measure set 

that captures the complexity of the 

services HHAs provide; (2) incorporate 

flexibility for future inclusion of the 

Improving Medicare Post-Acute Care 

Transformation Act of 2014 (IMPACT) 

measures that cut across post-acute care 

settings; (3) develop ‘second generation’ 

(of the HHVBP Model) measures of 

patient outcomes, health and functional 

status, shared decision making, and 

patient activation; (4) include a balance 

of process, outcome and patient 

experience measures; (5) advance the 

ability to measure cost and value; (6) 

add measures for appropriateness or 

overuse; and (7) promote infrastructure 

investments. This set of quality 

measures encompasses the multiple 

National Quality Strategy (NQS) 

domains 56 (80 FR 68668). The NQS 

domains include six priority areas 

identified in the CY 2016 HH PPS final 

rule (80 FR 68668) as the CMS 

Framework for Quality Measurement 

Mapping. These areas are: (1) Clinical 

quality of care; (2) Care coordination; (3) 

Population & community health; (4) 

Person- and Caregiver-centered 

experience and outcomes; (5) Safety; 

and (6) Efficiency and cost reduction. 

Figures 4a and 4b of the CY 2016 HH 

PPS final rule identified 15 outcome 

measures (five from the HHCAHPS, 

eight from OASIS, and two claims-based 

measures), and nine process measures 

(six from OASIS, and three New 

Measures, which were not previously 

reported in the home health setting) for 

use in the Model. 

In the CY 2017 HH PPS final rule, we 

removed four measures from the 

measure set for PY1 and subsequent 

performance years: (1) Care 

Management: Types and Sources of 

Assistance; (2) Prior Functioning ADL/ 

IADL; (3) Influenza Vaccine Data 

Collection Period: Does this episode of 

care include any dates on or between 

October 1 and March 31?; and (4) 

Reason Pneumococcal Vaccine Not 

Received, for the reasons discussed in 

that final rule (81 FR 76743 through 

76747). 

In the CY 2018 HH PPS final rule, we 

removed the Drug Education on All 

Medications Provided to Patient/ 

Caregiver during All Episodes of Care 

from the set of applicable measures 

beginning with PY3 for the reasons 

discussed in that final rule (82 FR 51703 

through 51704). 

For PY4 and subsequent performance 

years, we propose to remove two 

OASIS-based process measures, 

Influenza Immunization Received for 

Current Flu Season and Pneumococcal 

Polysaccharide Vaccine Ever Received, 

from the set of applicable measures. We 

adopted the Influenza Immunization 

Received for Current Flu Season 

measure beginning PY1 of the model. 

Since that time, we have received input 

from both stakeholders and a Technical 

Expert Panel (TEP) convened by our 

contractor in 2017 that because the 

measure does not exclude HHA patients 

who were offered the vaccine but 

declined it and patients who were 

ineligible to receive it due to 

contraindications, the measure may not 

fully capture HHA performance in the 

administration of the influenza vaccine. 

In response to these concerns, we are 

proposing to remove the measure from 

the applicable measure set beginning 

PY4. 

We also adopted the Pneumococcal 

Polysaccharide Vaccine Ever Received 

measure beginning PY1 of the model. 

This process measure reports the 

percentage of HH episodes during 

which patients were determined to have 

ever received the Pneumococcal 

Polysaccharide Vaccine. The measure is 

based on guidelines previously issued 

by the Advisory Committee on 

Immunization Practices (ACIP),57 which 

recommended use of a single dose of the 

23-valent pneumococcal polysaccharide 

vaccine (PPSV23) among all adults aged 

65 years and older and those adults aged 

19–64 years with underlying medical 

conditions that put them at greater risk 

for serious pneumococcal infection.58 In 

2014, the ACIP updated its guidelines to 

recommend that both PCV13 and 

PPSV23 be given to all 

immunocompetent adults aged ≥65 

years.59 The recommended intervals for 

sequential administration of PCV13 and 

PPSV23 depend on several patient 

factors including: The current age of the 

adult, whether the adult had previously 

received PPSV23, and the age of the 

adult at the time of prior PPSV23 

vaccination (if applicable). Because the 

Pneumococcal Polysaccharide Vaccine 

Ever Received measure does not fully 

reflect the current ACIP guidelines, we 

are proposing to remove this measure 

from the model beginning PY4. 

2. Proposal To Replace Three OASISBased Measures With Two Composite 

Measures Beginning With Performance 

Year 4 

As previously noted, one of the goals 

of the HHVBP Model is to study new 

potential quality and efficiency 

measures for appropriateness in the 

home health setting. In the CY 2018 HH 

PPS Final Rule, we solicited comment 

on additional quality measures for 

future consideration in the HHVBP 

model, specifically a Total Change in 

ADL/IADL Peformance by HHA Patients 

Measure, a Composite Functional 

Decline Measure, and behavioral health 

measures (82 FR 51706 through 51711). 

For the reasons discussed, we are 

proposing to replace three individual 

OASIS measures (Improvement in 

Bathing, Improvement in Bed 

Transferring, and Improvement in 

Ambulation-Locomotion) with two 

composite measures: Total Normalized 

Composite Change in Self-Care and 

Total Normalized Composite Change in 

Mobility. These proposed measures use 

several of the same ADLs as the 

composite measures discussed in the CY 

2018 HH PPS Final Rule (82 FR 51707). 

Our contractor convened a TEP in 

November 2017, which supported the 

use of two proposed composite 

measures in place of the three 

individual measures because HHA 

performance on the three individual 

measures would be combined with HHA 

performance on six additional ADL 

measures to create a more 

comprehensive assessment of HHA 

performance across a broader range of 

patient ADL outcomes. The TEP also 

noted that HHA performance is 

currently measured based on any 

change in improvement in patient 

status, while the composite measures 

would report the magnitude of patient 

change (either improvement or decline) 

across six self-care and three mobility 

patient outcomes. 

There are currently three ADL 

improvement measures in the HHVBP 

Model (Improvement in Bathing, 


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60 2017 Measures under Consideration List. 

https://www.cms.gov/Medicare/Quality-InitiativesPatient-Assessment-Instruments/QualityMeasures/ Downloads/2017-CMS-Measurement-Priorities-andNeeds.pdf. 

Improvement in Bed Transferring, and 

Improvement in AmbulationLocomotion). The maximum cumulative 

score across all three measures is 30. 

Because we are proposing to replace 

these three measures with the two 

composite measures, we are also 

proposing that each of the two 

composite measures would have a 

maximum score of 15 points, to ensure 

that the relative weighting of ADL-based 

measures would stay the same if the 

proposal to replace the three ADL 

improvement measures with the two 

composite measures is adopted. That is, 

there would still be a maximum of 30 

points available for ADL related 

measures. 

The proposed Total Normalized 

Composite Change in Self-Care and 

Total Normalized Composite Change in 

Mobility measures would represent a 

new direction in how quality of patient 

care is measured in home health. Both 

of these proposed composite measures 

combine several existing and endorsed 

Home Health Quality Reporting Program 

(HH QRP) outcome measures into 

focused composite measures to enhance 

quality reporting. These proposed 

composite measures fit within the 

Patient and Family Engagement 60

domain as functional status and 

functional decline are important to 

assess for residents in home health 

settings. Patients who receive care from 

an HHA may have functional limitations 

and may be at risk for further decline in 

function because of limited mobility 

and ambulation. 

The proposed Total Normalized 

Composite Change in Self-Care measure 

computes the magnitude of change, 

either positive or negative, based on a 

normalized amount of possible change 

on each of six OASIS-based quality 

outcomes. These six outcomes are as 

follows: 

• Improvement in Grooming (M1800) 

• Improvement in Upper Body Dressing 

(M1810) 

• Improvement in Lower Body Dressing 

(M1820) 

• Improvement in Bathing (M1830) 

• Improvement in Toileting Hygiene 

(M1845) 

• Improvement in Eating (M1870) 

The proposed Total Normalized 

Composite Change in Mobility measure 

computes the magnitude of change, 

either positive or negative, based on the 

normalized amount of possible change 

on each of three OASIS-based quality 

outcomes. These three outcomes are as 

follows: 

• Improvement in Toilet Transferring 

(M1840) 

• Improvement in Bed Transferring 

(M1850) 

• Improvement in Ambulation/ 

Locomotion (M1860) 

The magnitude of possible change for 

these OASIS items varies based on the 

number of response options. For 

example, M1800 (grooming) has four 

behaviorally-benchmarked response 

options (0 = most independent; 3 = least 

independent) while M1830 (bathing) 

has seven behaviorally-benchmarked 

response options (0 = most 

independent; 6 = least independent). 

The maximum possible change for a 

patient on item M1800 is 3, while the 

maximum possible change for a patient 

on item M1830 is 6. Both proposed 

composite measures would be 

computed and normalized at the 

episode level, then aggregated to the 

HHA level using the following steps: 

• Step 1: Calculate absolute change 

score for each OASIS item (based on 

change between Start of Care(SOC)/ 

Resumption of Care (ROC) and 

discharge) used to compute the Total 

Normalized Composite Change in SelfCare (6 items) or Total Normalized 

Composite Change in Mobility (3 items) 

measures. 

• Step 2: Normalize scores based on 

maximum change possible for each 

OASIS item (which varies across 

different items). The normalized scores 

result in a maximum possible change for 

any single item equal to ‘‘1’’; this score 

is provided when a patient achieves the 

maximum possible change for the 

OASIS item. 

• Step 3: Total score for Total 

Normalized Composite Change in SelfCare or Total Normalized Composite 

Change in Mobility is calculated by 

summing the normalized scores for the 

items in the measure. Hence, the 

maximum possible range of normalized 

scores at the patient level for Total 

Normalized Composite Change in SelfCare is ¥6 to +6, and for Total 

Normalized Composite Change in 

Mobility is ¥3 to +3. 

We created two prediction models for 

the proposed Total Normalized 

Composite Change in Self-Care (TNC_

SC) and Total Normalized Composite 

Change in Mobility (TNC_MOB) 

measures using information from OASIS 

items and patient clinical condition 

categories (see Table 50 for details on 

the number of OASIS items and OASIS 

clinical categories used in the 

prediction models). We computed 

multiple ordinary least squares (OLS) 

analyses beginning with risk factors that 

were available from OASIS D items and 

patient condition groupings. Any single 

OASIS D item might have more than 

one risk factor because we create 

dichotomous risk factors for each 

response option on scaled (from 

dependence to independence) OASIS 

items. Those risk factors that were 

statistically significant at p <0.0001 

level were kept in the prediction model. 

These two versions (CY 2014 and CY 

2015) of the prediction models were 

done as ‘‘proof of concept.’’ We are 

proposing that the actual prediction 

models that would be used if the 

proposed composite measures are 

finalized would use episodes of care 

that ended in CY 2017, which would be 

the baseline year for the quality 

outcome measures used to compute the 

two proposed composite measures, as 

listed previously. The baseline year for 

these two composite measures would be 

calendar year 2017. 

The following Table 50 provides an 

overview of results from the CY 2014 

and CY 2015 prediction models for each 

proposed measure with estimated Rsquared values comparing observed vs. 

predicted episode-level performance. 

TABLE 50—OBSERVED VERSUS PREDICTED EPISODE-LEVEL PEFORMANCE FOR THE PROPOSED TOTAL NORMALIZED

COMPOSITE CHANGE MEASURES

Prediction model for 

Number of 

OASIS items 

used 

Number of 

clinical 

categories 

R-squared 

value 

2014 TNC_SC .............................................................................................................................. 42 14 0.299 

2015 TNC_SC .............................................................................................................................. 41 13 0.311 

2014 TNC_MOB .......................................................................................................................... 42 16 0.289 


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61 Data Specifications—https://www.cms.gov/ 

Medicare/Quality-Initiatives-Patient-AssessmentInstruments/OASIS/DataSpecifications.html. 

TABLE 50—OBSERVED VERSUS PREDICTED EPISODE-LEVEL PEFORMANCE FOR THE PROPOSED TOTAL NORMALIZED

COMPOSITE CHANGE MEASURES—Continued 

Prediction model for 

Number of 

OASIS items 

used 

Number of 

clinical 

categories 

R-squared 

value 

2015 TNC_MOB .......................................................................................................................... 41 18 0.288 

Table 50 presents the following 

summary information for the prediction 

models for the two proposed composite 

measures. 

• Prediction Model for: This column 

identifies the measure and year of data 

used for the two ‘‘proof of concept’’ 

prediction models created for each of 

the two proposed composite measures, 

Total Normalized Composite Change in 

Self-Care (TNC_SC) and Total 

Normalized Composite Change in 

Mobility (TNC_MOB). The development 

of the prediction models was identical 

in terms of the list of potential risk 

factors and clinical categories. The only 

difference was one set of prediction 

models used episodes of care that ended 

in CY 2014, while the other set of 

prediction models used episodes of care 

that ended in CY 2015. 

• Number of OASIS Items Used: This 

column indicates the number of OASIS 

items used as risk factors in the 

prediction model. For each prediction 

model, the number of OASIS items used 

is based on the number of risk factors 

that were statistically significant at 

p <0.0001 level in the prediction model. 

• Number of Clinical Categories: This 

column indicates the number of patient 

clinical categories (for example, 

diagnoses related to infections or 

neoplasms or endocrine disorders) that 

are used as risk factors in the prediction 

model. 

• R-squared Value: The R-squared 

values are a measure of the proportion 

of the variation in outcomes that is 

accounted for by the prediction model. 

The results show that the methodology 

that was used to create the prediction 

models produced very consistent 

models that predict at least 29 percent 

of the variability in the proposed 

composite measures. 

The prediction models are applied at 

the episode level to create a specific 

predicted value for the composite 

measure for each episode of care. These 

episode level predicted values are 

averaged to compute a national 

predicted value and an HHA predicted 

value. The episode level observed 

values are averaged to compute the 

HHA observed value. The HHA TNC_SC 

and TNC_MOB observed scores are risk 

adjusted based on the following 

formula: 

HHA Risk Adjusted = HHA Observed + 

National Predicted¥HHA Predicted 

HHAs are not allowed to skip any of 

the OASIS items that are used to 

compute these proposed composite 

measures or the risk factors that 

comprise the prediction models for the 

two proposed composite measures. The 

OASIS items typically do not include 

‘‘not available (NA)’’ or ‘‘unknown 

(UK)’’ response options, and per 

HHQRP requirements,61 HHAs must 

provide responses to all OASIS items for 

the OASIS assessment to be accepted 

into the CMS data repository. Therefore, 

while we believe the likelihood that a 

value for one of these items would be 

missing is extremely small, we are 

proposing to impute a value of ‘‘0’’ if a 

value is ‘‘missing.’’ Specifically, if for 

some reason the information on one or 

more OASIS items that are used to 

compute TNC_SC or TNC_MOB is 

missing, we impute the value of ‘‘0’’ (no 

change) for the missing value. Similarly, 

if for some reason the information on 

one or more OASIS items that are used 

as a risk factor is missing, we impute the 

value of ‘‘0’’ (no effect) for missing 

values that comprise the prediction 

models for the two proposed composite 

measures. Table 51 contains summary 

information for these two proposed 

composite measures. Because the 

proposed TNC_SC and TNC_MOB are 

composite measures rather than simple 

outcome measures, the terms 

‘‘Numerator’’ and ‘‘Denominator’’ do not 

apply to how these measures are 

calculated. Therefore, for these 

proposed composite measures, the 

‘‘Numerator’’ and ‘‘Denominator’’ 

columns in Table 51 are replaced with 

columns describing ‘‘Measure 

Computation’’ and ‘‘Risk Adjustment’’. 

Table 51 contains the set of applicable 

measures under the HHVBP model, if 

we finalize our proposals to remove the 

OASIS-based measures, Influenza 

Immunization Received for Current Flu 

Season, Pneumococcal Polysaccharide 

Vaccine Ever Received, Improvement in 

Ambulation-Locomotion, Improvement 

in Bed Transferring, and Improvement 

in Bathing, and add the two proposed 

OASIS-based outcome composite 

measures, Total Change in Self-Care and 

Total Change in Mobility. This measure 

set, if our proposals are finalized, would 

be applicable to PY4 and each 

subsequent performance year until such 

time that another set of applicable 

measures, or changes to this measure 

set, are proposed and finalized in future 

rulemaking. 

TABLE 51—MEASURE SET FOR THE HHVBP MODEL BEGINNING PY 4 * 

NQS domains Measure title Measure type Identifier Data source Numerator Denominator 

Clinical Quality of 

Care.

Improvement in 

Dyspnea.

Outcome ...... NA ................ OASIS 

(M1400).

Number of home health episodes 

of care where the discharge assessment indicates less dyspnea 

at discharge than at start (or resumption) of care.

Number of home health episodes 

of care ending with a discharge 

during the reporting period, other 

than those covered by generic or 

measure-specific exclusions. 

Communication & 

Care Coordination.

Discharged to 

Community.

Outcome ...... NA ................ OASIS 

(M2420).

Number of home health episodes 

where the assessment completed at the discharge indicates 

the patient remained in the community after discharge.

Number of home health episodes 

of care ending with discharge or 

transfer to inpatient facility during 

the reporting period, other than 

those covered by generic or 

measure-specific exclusions. 


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TABLE 51—MEASURE SET FOR THE HHVBP MODEL BEGINNING PY 4 *—Continued 

NQS domains Measure title Measure type Identifier Data source Numerator Denominator 

Efficiency & Cost 

Reduction.

Acute Care Hospitalization: Unplanned Hospitalization during first 60 days 

of Home Health.

Outcome ...... NQF0171 ..... CCW 

(Claims).

Number of home health stays for 

patients who have a Medicare 

claim for an unplanned admission to an acute care hospital in 

the 60 days following the start of 

the home health stay.

Number of home health stays that 

begin during the 12-month observation period. A home health 

stay is a sequence of home 

health payment episodes separated from other home health 

payment episodes by at least 60 

days. 

Efficiency & Cost 

Reduction.

Emergency Department Use 

without Hospitalization.

Outcome ...... NQF0173 ..... CCW 

(Claims).

Number of home health stays for 

patients who have a Medicare 

claim for outpatient emergency 

department use and no claims 

for acute care hospitalization in 

the 60 days following the start of 

the home health stay.

Number of home health stays that 

begin during the 12-month observation period. A home health 

stay is a sequence of home 

health payment episodes separated from other home health 

payment episodes by at least 60 

days. 

Patient Safety ........ Improvement in 

Pain Interfering 

with Activity.

Outcome ...... NQF0177 ..... OASIS 

(M1242).

Number of home health episodes 

of care where the value recorded 

on the discharge assessment indicates less frequent pain at discharge than at the start (or resumption) of care.

Number of home health episodes 

of care ending with a discharge 

during the reporting period, other 

than those covered by generic or 

measure-specific exclusions. 

Patient Safety ........ Improvement in 

Management of 

Oral Medications.

Outcome ...... NQF0176 ..... OASIS 

(M2020).

Number of home health episodes 

of care where the value recorded 

on the discharge assessment indicates less impairment in taking 

oral medications correctly at discharge than at start (or resumption) of care.

Number of home health episodes 

of care ending with a discharge 

during the reporting period, other 

than those covered by generic or 

measure-specific exclusions. 

Patient & Caregiver-Centered 

Experience.

Care of Patients ... Outcome ...... ...................... CAHPS ........ NA ................................................... NA. 

Patient & Caregiver-Centered 

Experience.

Communications 

between Providers and Patients.

Outcome ...... ...................... CAHPS ........ NA ................................................... NA. 

Patient & Caregiver-Centered 

Experience.

Specific Care 

Issues.

Outcome ...... ...................... CAHPS ........ NA ................................................... NA. 

Patient & Caregiver-Centered 

Experience.

Overall rating of 

home health 

care.

Outcome ...... ...................... CAHPS ........ NA ................................................... NA. 

Patient & Caregiver-Centered 

Experience.

Willingness to recommend the 

agency.

Outcome ...... ...................... CAHPS ........ NA ................................................... NA. 

Population/Community Health.Influenza Vaccination Coverage 

for Home Health 

Care Personnel.

Process ........ NQF0431 

(Used in 

other care 

settings, 

not Home 

Health).

Reported by 

HHAs 

through 

Web Portal.

Healthcare personnel in the denominator population who during 

the time from October 1 (or when 

the vaccine became available) 

through March 31 of the following 

year: (a) Received an influenza 

vaccination administered at the 

healthcare facility, or reported in 

writing or provided documentation that influenza vaccination 

was received elsewhere: Or (b) 

were determined to have a medical contraindication/condition of 

severe allergic reaction to eggs 

or to other components of the 

vaccine or history of GuillainBarre Syndrome within 6 weeks 

after a previous influenza vaccination; or (c) declined influenza 

vaccination; or (d) persons with 

unknown vaccination status or 

who do not otherwise meet any 

of the definitions of the previously mentioned numerator categories.

Number of healthcare personnel 

who are working in the 

healthcare facility for at least 1 

working day between October 1 

and March 31 of the following 

year, regardless of clinical responsibility or patient contact. 

Population/Community Health.Herpes zoster 

(Shingles) vaccination: Has the 

patient ever received the shingles vaccination?.

Process ........ NA ................ Reported by 

HHAs 

through 

Web Portal.

Total number of Medicare beneficiaries aged 60 years and over 

who report having ever received 

zoster vaccine (shingles vaccine).

Total number of Medicare beneficiaries aged 60 years and over 

receiving services from the HHA. 


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TABLE 51—MEASURE SET FOR THE HHVBP MODEL BEGINNING PY 4 *—Continued 

NQS domains Measure title Measure type Identifier Data source Numerator Denominator 

Communication & 

Care Coordination.

Advance Care 

Plan.

Process ........ NQF0326 ..... Reported by 

HHAs 

through 

Web Portal.

Patients who have an advance 

care plan or surrogate decision 

maker documented in the medical record or documentation in 

the medical record that an advanced care plan was discussed 

but the patient did not wish or 

was not able to name a surrogate decision maker or provide 

an advance care plan.

All patients aged 65 years and 

older. 

NQS domains Measure title Measure type Identifier Data source Measure computation ** Risk adjustment ** 

Patient and Family 

Engagement.

Total Normalized 

Composite 

Change in SelfCare.

Composite 

Outcome.

NA ................ OASIS 

(M1800) 

(M1810) 

(M1820) 

(M1830) 

(M1845) 

(M1870).

The total normalized change in 

self-care functioning across six 

OASIS items (grooming, bathing, 

upper & lower body dressing, toilet hygiene, and eating).

A prediction model is computed at 

the episode level. The predicted 

value for the HHA and the national value of the predicted values are calculated and are used 

to calculate the risk-adjusted rate 

for the HHA, which is calculated 

using this formula: HHA Risk Adjusted = HHA Observed + National Predicted ¥ HHA Predicted. 

Patient and Family 

Engagement.

Total Normalized 

Composite 

Change in Mobility.

Composite 

Outcome.

NA ................ OASIS 

(M1840) 

(M1850) 

(M1860).

The total normalized change in mobility functioning across three 

OASIS items (toilet transferring, 

bed transferring, and ambulation/ 

locomotion).

A prediction model is computed at 

the episode level. The predicted 

value for the HHA and the national value of the predicted values are calculated and are used 

to calculate the risk-adjusted rate 

for the HHA, which is calculated 

using this formula: HHA Risk Adjusted = HHA Observed + National Predicted ¥ HHA Predicted. 

* Notes: For more detailed information on the measures using OASIS refer to the OASIS–C2 Guidance Manual effective January 1, 2017 available at https://

www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/Downloads/OASIS-C2-Guidance-Manual-6-29-16.pdf. For NQF endorsed measures see The NQF Quality Positioning System available at http://www.qualityforum.org/QPS. For non-NQF measures using OASIS see 

links for data tables related to OASIS measures at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/ 

index.html. For information on HHCAHPS measures see https://homehealthcahps.org/SurveyandProtocols/SurveyMaterials.aspx. ** Because the proposed Total Normalized Composite Change in Self-Care and Mobility measures are composite measures rather than simply outcome measures, 

the terms ‘‘Numerator’’ and ‘‘Denominator’’ do not apply. 

We invite public comment on the 

proposals to remove two OASIS-based 

measures, Influenza Immunization 

Received for Current Flu Season and 

Pneumococcal Polysaccharide Vaccine 

Ever Received, from the set of 

applicable measures for PY4 and 

subsequent performance years. We also 

invite public comment on the proposals 

to replace three OASIS-based measures, 

Improvement in AmbulationLocomotion, Improvement in Bed 

Transferring, and Improvement in 

Bathing, with two proposed composite 

measures, Total Normalized Composite 

Change in Self-Care and Total 

Normalized Composite Change in 

Mobility, for PY4 and subsequent 

performance years. 

3. Proposal To Reweight the OASISBased, Claims-Based, and HHCAHPS 

Measures 

In the CY 2016 HH PPS final rule, we 

finalized weighting measures within 

each of the HHVBP Model’s four 

classifications (Clinical Quality of Care, 

Care Coordination and Efficiency, 

Person and Caregiver-Centered 

Experience, and New Measures) the 

same for the purposes of payment 

adjustment. We finalized weighting 

each individual measure equally 

because we did not want any one 

measure within a classification to be 

more important than another measure, 

to encourage HHAs to approach quality 

improvement initiatives more broadly, 

and to address concerns where HHAs 

may be providing services to 

beneficiaries with different needs. 

Under this approach, a measure’s 

weight remains the same even if some 

of the measures within a classification 

group have no available data. We stated 

that in subsequent years of the Model, 

we would monitor the impact of equally 

weighting the individual measures and 

may consider changes to the weighting 

methodology after analysis and in 

rulemaking (80 FR 68679). 

For PY4 and subsequent performance 

years, we are proposing to revise how 

we weight the individual measures and 

to amend § 484.320(c) accordingly. 

Specifically, we are proposing to change 

our methodology for calculating the 

Total Performance Score (TPS) by 

weighting the measure categories so that 

the OASIS-based measure category and 

the claims-based measure category 

would each count for 35 percent and the 

HHCAHPS measure category would 

count for 30 percent of the 90 percent 

of the TPS that is based on performance 

of the Clinical Quality of Care, Care 

Coordination and Efficiency, and Person 

and Caregiver-Centered Experience 

measures. Note that these measures and 

their proposed revised weights would 

continue to account for the 90 percent 

of the TPS that is based on the Clinical 

Quality of Care, Care Coordination and 

Efficiency, and Person and CaregiverCentered Experience measures. Data 

reporting for each New Measure would 

continue to have equal weight and 

account for the 10 percent of the TPS 

that is based on the New Measures 

collected as part of the Model. As 

discussed further below, we believe that 

this proposed reweighting, to allow for 

more weight for the claims-based 

measures, would better support 

improvement in those measures. 

Weights would also be adjusted under 

this proposal for HHAs that are missing 

entire measure categories. For example, 


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if an HHA is missing all HHCAHPS 

measures, the OASIS and claims-based 

measure categories would both have the 

same weight (50 percent each). We 

believe that this approach would also 

increase the weight given to the claimsbased measures, and as a result give 

HHAs more incentive to focus on 

improving them. Additionally, if 

measures within a category are missing, 

the weights of the remaining measures 

within that measure category would be 

adjusted proportionally, while the 

weight of the category as a whole would 

remain consistent. We are also 

proposing that the weight of the Acute 

Care Hospitalization: Unplanned 

Hospitalization during first 60 days of 

Home Health claims-based measure 

would be increased so that it has three 

times the weight of the Emergency 

Department Use without Hospitalization 

claims-based measure, based on our 

understanding that HHAs may have 

more control over the Acute Care 

Hospitalization: Unplanned 

Hospitalization during first 60 days of 

Home Health claims-based measure. In 

addition, because inpatient 

hospitalizations generally cost more 

than ED visits, we believe improvement 

in the Acute Care Hospitalization: 

Unplanned Hospitalization during first 

60 days of Home Health claims-based 

measure may have a greater impact on 

Medicare expenditures. 

We are proposing to reweight the 

measures based on our ongoing 

monitoring and analysis of claims and 

OASIS-based measures, which shows 

that there has been a steady 

improvement in OASIS-based measures, 

while improvement in claims-based 

measures has been relatively flat. For 

example, Figures 5 and 6 show the 

change in average performance for the 

claims-based and OASIS-based 

performance measures used in the 

Model. For both figures, we report the 

trends observed in Model and nonModel states. In both Model and nonModel states, there has been a slight 

increase (indicating worse performance) 

in the Acute Care Hospitalization: 

Unplanned Hospitalization during first 

60 days of Home Health measure. For all 

OASIS-based measures, except the 

Improvement in Management of Oral 

Medications measure and the Discharge 

to Community measure, there has been 

substantial improvement in both Model 

and non-Model states. Given these 

results, we believe that increasing the 

weight given to the claims-based 

measures, and the Acute Care 

Hospitalization: Unplanned 

Hospitalization during first 60 days of 

Home Health measure in particular, may 

give HHAs greater incentive to focus on 

quality improvement in the claimsbased measures. Increasing the weight 

of the claims-based measures was also 

supported by the contractor’s TEP. 

BILLING CODE 4120–01–P 


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Table 52 shows the current and 

proposed weights for each measure 

based on this proposal to change the 

weighting methodology from weighting 

each individual measure equally to 

weighting the OASIS, claims-based, and 

HHCAHPS measure categories at 35- 

percent, 35-percent and 30-percent, 

respectively. Table 52 also shows the 

proposed weighting methodology based 

on various scoring scenarios. For 

example, for HHAs that are exempt from 

their beneficiaries completing 

HHCAHPS surveys, the total weight 

given to OASIS-based measures scores 

would be 50 percent, with all OASISbased measures (other than the two 

proposed composite measures) 

accounting for an equal proportion of 

that 50 percent, and the total weight 

given to the claims-based measures 

scores would be 50 percent, with the 

Acute Care Hospitalization: Unplanned 

Hospitalizations measure accounting for 

37.50 percent and the ED Use without 

Hospitalization measure accounting for 

12.50 percent. Finally, Table 52 shows 

the change in the number of HHAs, by 

size, that would qualify for a TPS and 

payment adjustment under the current 

and proposed weighting methodologies, 

using CY 2016 data. We note that Table 

52 reflects only the proposed changes to 

the weighting methodology and not the 

other proposed changes to the HHVBP 

model for CY 2019 which, if finalized, 

would change the proposed weights as 

set forth in Table 52. We refer readers 

to Table 65 in section X. of this 

proposed rule, which reflects the 

weighting that would apply if all of our 

proposed changes, including the 

proposed changes to the applicable 

measure set, are adopted for CY 2019. 

As reflected in that table, the two 

proposed composite measures, if 

finalized, would have weights of 7.5 

percent when all three measure 

categories are reported. 


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BILLING CODE 4120–01–C 

We invite public comment on the 

within the Clinical Quality of Care, Care 

proposal to reweight the measures 

measures account for 35-percent, the 

classifications so that the OASIS-based 

and Caregiver-Centered Experience 

Coordination and Efficiency, and Person 

that is based on performance on these 

30-percent of the 90 percent of the TPS 

percent, and the HHCAHPS account for 

claims-based measures account for 35- 


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TABLE 52: CURRENT AND PROPOSED WEIGHTS FOR INDIVIDUAL PERFORMAN

Current Weights (equal weighting) Proposed Weights (OASIS 35%; Cl

All No No No claims or All No 

Measures HHCAHPS claims HHCAHPS Measures HHCAHPS 

(n=1,026) (n=465) (n=20) (n=99) (n=1,026) (n=460) No cl

LargeHHAs 1023 382 20 49 1023 380 

SmallHHAs 3 83 0 50 3 80 

OASIS 

Flu vaccine ever received* 6.25% 9.09% 7.14% ll.ll% 3.89% 5.56% Pneumococcal vaccine* 6.25% 9.09% 7.14% ll.ll% 3.89% 5.56% 

Improve Bathing** 6.25% 9.09% 7.14% ll.ll% 3.89% 5.56% Improve Bed Transfer** 6.25% 9.09% 7.14% ll.ll% 3.89% 5.56% Improve Ambulation** 6.25% 9.09% 7.14% ll.ll% 3.89% 5.56% Improve Oral Meds 6.25% 9.09% 7.14% ll.ll% 3.89% 5.56% Improve Dyspnea 6.25% 9.09% 7.14% ll.ll% 3.89% 5.56% Improve Pain 6.25% 9.09% 7.14% ll.ll% 3.89% 5.56% 

Discharge to Community 6.25% 9.09% 7.14% ll.ll% 3.89% 5.56% 

Total weight for OASIS measures 56.25% 81.82% 64.26% 100.00% 35.00% 50.00% 

Claims 

Hospitalizations 6.25% 9.09% 0.00% 0.00% 26.25% 37.50% 

Outpatient ED 6.25% 9.09% 0.00% 0.00% 8.75% 12.50% 

Total weight for claims measures 12.50% 18.18% 0.00% 0.00% 35.00% 50.00% 

HHCAHPS 

Care of patients 6.25% 0.00% 7.14% 0.00% 6.00% 0.00% 

Communication between provider 

and patient 6.25% 0.00% 7.14% 0.00% 6.00% 0.00% 

Discussion of specific care issues 6.25% 0.00% 7.14% 0.00% 6.00% 0.00% 

Overall rating of care 6.25% 0.00% 7.14% 0.00% 6.00% 0.00% 

Willingness to recommend HHA to 

family or friends 6.25% 0.00% 7.14% 0.00% 6.00% 0.00% 

Total weight for HHCAHPS 

measures 31.25% 0.00% 35.70% 0.00% 30.00% 0.00% 

Notes: *Measures are proposed to be removed from the applicable measure set beginning CY 2019/PY 4. 

**Measures are proposed to be removed if proposed composite measures are added to the applicable measure set beginning CY 2019/PY 4. 
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules 32435 

measures, for PY4 and subsequent 

performance years. We are also 

proposing to amend § 484.320 to reflect 

these proposed changes. Specifically, 

we are proposing to amend § 484.320 to 

state that for performance years 4 and 5, 

CMS will sum all points awarded for 

each applicable measure within each 

category of measures (OASIS-based, 

claims-based, and HHCAHPS) excluding 

the New Measures, weighted at 35- 

percent for the OASIS-based measure 

category, 35-percent for the claimsbased measure category, and 30-percent 

for the HHCAHPS measure category, to 

calculate a value worth 90-percent of 

the Total Performance Score. Table 53 is 

a sample calculation to show how this 

proposal, in connection with the 

proposed changes to the measure set, 

would affect scoring under the model as 

set forth in prior rulemaking (80 FR 

68679 through 68686) when all three 

measure categories are reported. 

TABLE 53—SAMPLE HHVBP TOTAL PERFORMANCE SCORE CALCULATION UNDER CURRENT AND PROPOSED WEIGHTS

FOR INDIVIDUAL PERFORMANCE MEASURES

Points for 

current 

measures 

Current 

weight 

(%) 

Points for 

proposed 

measures 

Proposed 

weight 

(%) 

Weighted 

points 

OASIS: 

Composite self-care ...................................................... N/A 0.00 7.661 7.50 9.19 

Composite mobility ....................................................... N/A 0.00 5.299 7.50 6.36 

Flu vaccine ever received ............................................. 7.662 6.25 N/A 0.00 N/A 

Pneumococcal vaccine ................................................. 8.162 6.25 N/A 0.00 N/A 

Improvement in bathing ................................................ 5.064 6.25 N/A 0.00 N/A 

Improvement in bed transfer ........................................ 4.171 6.25 N/A 0.00 N/A 

Improvement in ambulation .......................................... 3.725 6.25 N/A 0.00 N/A 

Improve oral meds ........................................................ 3.302 6.25 3.302 5.00 2.64 

Improve Dyspnea .......................................................... 4.633 6.25 4.633 5.00 3.71 

Improve Pain ................................................................. 4.279 6.25 4.279 5.00 3.42 

Discharge to community ............................................... 0.618 6.25 0.618 5.00 0.49 

Claims: 

Outpatient ED ............................................................... 0 6.25 0 8.75 0.00 

Hospitalizations ............................................................. 1.18 6.25 1.18 26.25 4.96 

HHCAHPS: 

Care of patients ............................................................ 10 6.25 10 6.00 9.60 

Communication between provider and patient ............. 10 6.25 10 6.00 9.60 

Discussion of special care issues ................................ 10 6.25 10 6.00 9.60 

Overall rating of care .................................................... 5.921 6.25 5.921 6.00 5.68 

Willingness to recommend HHA to family and friends 8.406 6.25 8.406 6.00 8.07 

Total ....................................................................... 87.123 100.00 ........................ 100.00 57.776

Total performance score calculation Current Proposed 

Raw score ................................................................................................................................................................ 87.123 57.776 

Scaled score (adjusted for # of measures present) ................................................................................................ 58.082 57.776 

Weighted score (90% of scaled score) ................................................................................................................... 52.274 51.998 

New measure score ................................................................................................................................................. 100.000 100.000 

Weighted new measure score (10% of new measure score) ................................................................................. 10 10 

TPS (sum of weighted score and weighted new measure score) .......................................................................... 62.274 61.998 

C. Performance Scoring Methodology 

1. Proposal To Rescore the Maximum 

Amount of Improvement Points 

In the CY 2016 HH PPS final rule, we 

finalized that an HHA could earn 0–10 

points based on how much its 

performance in the performance period 

improved from its performance on each 

measure in the Clinical Quality of Care, 

Care Coordination and Efficiency, and 

Person and Caregiver-Centered 

Experience classifications during the 

baseline period. We noted, in response 

to public comment about our scoring 

methodology for improvement points, 

that we would monitor and evaluate the 

impact of awarding an equal amount of 

points for both achievement and 

improvement and may consider changes 

to the weight of the improvement score 

relative to the achievement score in 

future years through rulemaking (80 FR 

68682). 

We are proposing to reduce the 

maximum amount of improvement 

points, from 10 points to 9 points, for 

PY4 and subsequent performance years 

for all measures except for, if finalized, 

the Total Normalized Composite Change 

in Self-Care and Total Normalized 

Composite Change in Mobility 

measures, for which the maximum 

improvement points would be 13.5. The 

maximum score of 13.5 represents 90- 

percent of the maximum 15 points that 

could be earned for each of the two 

proposed composite measures. The 

HHVBP Model focuses on having all 

HHAs provide high quality care and we 

believe that awarding more points for 

achievement than for improvement 

beginning with PY4 of the model would 

support this goal. We expect that at this 

point several years into participation in 

the Model, participating HHAs have had 

enough time to make the necessary 

investments in quality improvement 

efforts to support a higher level of care, 

warranting a slightly stronger focus on 

achievement over improvement on 

measure performance. 

We believe that reducing the 

maximum improvement points to 9 

would encourage HHAs to focus on 

achieving higher performance levels and 

incentivizing in this manner would 

encourage HHAs to rely less on their 

improvement and more on their 

achievement. 

This proposal would also be 

consistent with public comments, and 

suggestions provided by our contractor’s 

TEP. As summarized in the CY 2016 HH 

PPS final rule, we received comments 

encouraging us to focus on rewarding 


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62Achievement points are calculated as 9 * (HHA 

Performance Year Score ¥ Achievement 

Threshold)/(Benchmark ¥ Achievement threshold) 

+ 0.5. 

63The formula for calculating improvement 

points is 9 * (HHA Performance Year Score ¥ HHA 

Baseline Period Score)/(HHA Benchmark ¥ HHA 

Baseline Period Score) ¥ 0.5. 

the achievement of specified quality 

scores, and reduce the emphasis on 

improvement scores after the initial 3 

years of the HHVBP Model. Some 

commenters suggested measuring 

performance primarily based on 

achievement of specified quality scores 

with a declining emphasis over time on 

improvement versus achievement (80 

FR 68682). 

The TEP also agreed with reducing 

the maximum number of improvement 

points, which they believed would 

better encourage HHAs to pursue 

improved health outcomes for 

beneficiaries. We note that for the 

Hospital Value-Based Purchasing 

(HVBP) Program, CMS finalized a 

scoring methodology where hospitals 

could earn a maximum of 9 

improvement points if their 

improvement score falls between the 

improvement threshold and the 

benchmark (76 FR 26515). Similarly, 

HHVBP is now proposing a scoring 

methodology where HHAs could earn a 

maximum of 9 improvement points. 

We propose that an HHA would earn 

0–9 points based on how much its 

performance during the performance 

period improved from its performance 

on each measure in the Clinical Quality 

of Care, Care Coordination and 

Efficiency, and Person and CaregiverCentered Experience classifications 

during the baseline period. A unique 

improvement range for each measure 

would be established for each HHA that 

defines the difference between the 

HHA’s baseline period score and the 

same state level benchmark for the 

measure used in the achievement 

scoring calculation, according to the 

proposed improvement formula. If an 

HHA’s performance on the measure 

during the performance period was— 

• Equal to or higher than the 

benchmark score, the HHA could 

receive an improvement score of 9 

points (an HHA with performance equal 

to or higher than the benchmark score 

could still receive the maximum of 10 

points for achievement); 

• Greater than its baseline period 

score but below the benchmark (within 

the improvement range), the HHA could 

receive an improvement score of 0–9 

(except for, if finalized, the Total 

Normalized Composite Change in SelfCare and Total Normalized Composite 

Change in Mobility measures, for which 

the maximum improvement score 

would be 15) for each of the two 

proposed composite measures) based on 

the formula and as illustrated in the 

examples below; or, 

• Equal to or lower than its baseline 

period score on the measure, the HHA 

could receive zero points for 

improvement. 

2. Examples of Calculating Achievement 

and Improvement Scores 

For illustrative purposes we present 

the following examples of how the 

proposed changes to the performance 

scoring methodology would be applied 

in the context of the measures in the 

Clinical Quality of Care, Care 

Coordination and Efficiency, and Person 

and Caregiver Centered Experience 

classifications. These HHA examples are 

based on data from 2015 (for the 

baseline period) and 2016 (for the 

performance year). Figure 7 shows the 

scoring for HHA ‘A’ as an example. The 

benchmark calculated for the 

improvement in pain measure is 97.676 

for HHA A (note that the benchmark is 

calculated as the mean of the top decile 

in the baseline period for the state). The 

achievement threshold was 75.358 (this 

is defined as the performance of the 

median or the 50th percentile among 

HHAs in the baseline period for the 

state). HHA A’s Year 1 performance rate 

for the measure was 98.348, which 

exceeds the benchmark so the HHA 

earned the maximum 10 points based on 

its achievement score. Its improvement 

score is irrelevant in the calculation 

because measure performance exceeded 

the benchmark. 

Figure 7 also shows the scoring for 

HHA ‘B.’ As referenced below, HHA B’s 

performance on this measure went from 

52.168 (which was below the 

achievement threshold) in the baseline 

period to 76.765 (which is above the 

achievement threshold) in the 

performance period. Applying the 

achievement scale, HHA B’ would earn 

1.067 points for achievement, calculated 

as follows: 9 * (76.765 ¥ 75.358)/ 

(97.676 ¥ 75.358) + 0.5 = 1.067.62

Calculating HHA B’s improvement score 

yields the following result: based on 

HHA B’s period-to-period improvement, 

from 52.168 in the baseline year to 

76.765 in the performance year, HHA B 

would earn 4.364 points, calculated as 

follows: 9 * (76.765 ¥ 52.168)/(97.676 

¥ 75.358) ¥ 0.5 = 4.364.63 Because the 

higher of the achievement and 

improvement scores is used, HHA B 

would receive 4.364 points for this 

measure. 

In Figure 8, HHA ‘C’ yielded a decline 

in performance on the improvement in 

pain measure, falling from 70.266 to 

58.487. HHA C’s performance during 

the performance period was lower than 

the achievement threshold of 75.358 

and, as a result, the HHA would receive 

0 points based on achievement. It would 

also receive 0 points for improvement, 

because its performance during the 

performance period was lower than its 

performance during the baseline period. 

BILLING CODE 4120–01–P 


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FIGURE 7: EXAMPLE OF AN HHA EARNING POINTS BY 

ACHIEVEMENT OR IMPROVEMENT SCORING 

Achievement 

HHAA 

HHA B Improvement 

Measure: Improvement in Pain 

Achievement Threshold Benchmark 

75.358 <E(:-------~) 97.676 

Achievement 

Range 

HHA A Score: 10 maximum points for achievement 

Baseline 

Year Score 

Performance 

Year Score 

52.168 +----------+ 76.765 

HHA B Score: The greater of 1.067 points for 

achievement and 4.364 points for improvement. 

98.348 
32438 Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules 

BILLING CODE 4120–01–C 

We would monitor and evaluate the 

impact of reducing the maximum 

improvement points to 9 and would 

consider whether to propose more 

changes to the weight of the 

improvement score relative to the 

achievement score in future years 

through rulemaking. 

We invite public comment on the 

proposal to reduce the maximum 

amount of improvement points, from 10 

points to 9 points for PY 4 and 

subsequent performance years. 

D. Update on the Public Display of Total 

Performance Scores 

In the CY 2016 HH PPS final rule (80 

FR 68658), we stated that one of the 

three goals of the HHVBP Model is to 

enhance the current public reporting 

processes. We reiterated this goal and 

continued discussing the public display 

of HHAs’ Total Performance Scores 

(TPSs) in the CY 2017 HH PPS final rule 

(81 FR 76751 through 76752). We 

believe that publicly reporting a 

participating HHA’s TPS will encourage 

providers and patients to use this 

information when selecting an HHA to 

provide quality care. We are encouraged 

by the previous stakeholder comments 

and support for public reporting that 

could assist patients, physicians, 

discharge planners, and other referral 

sources to choose higher-performing 

HHAs. 

In the CY 2017 HH PPS final rule, we 

noted that one commenter suggested 

that we not consider public display 

until after the Model was evaluated. 

Another commenter favored the public 

display of the TPS, but recommended 

that CMS use a transparent process and 

involve stakeholders in deciding what 

will be reported, and provide a review 

period with a process for review and 

appeal before reporting. 

As discussed in the CY 2017 HH PPS 

final rule, we are considering public 

reporting for the HHVBP Model after 

allowing analysis of at least eight 

quarters of performance data for the 

Model and the opportunity to compare 

how these results align with other 

publicly reported quality data (81 FR 

76751). While we are not making a 

specific proposal at this time, we are 

soliciting further public comment on 

what information, specifically from the 

CY 2017 Annual Total Performance 

Score and Payment Adjustment Reports 

and subsequent annual reports, should 

be made publicly available. We note 

that HHAs have the opportunity to 

review and appeal their Annual Total 

Performance Score and Payment 

Adjustment Reports as outlined in the 

appeals process finalized in the CY 2017 

HH PPS final rule (81 FR 76747 through 

76750). Examples of the information 

included in the Annual Total 

Performance Score and Payment 

Adjustment Report include the agency: 

Name, address, TPS, payment 

adjustment percentage, performance 

information for each measure used in 

the Model (for example, quality measure 

scores, achievement, and improvement 

points), state and cohort information, 

and percentile ranking. Based on the 

public comments received, we will 

consider what information, specifically 

from the annual reports, we may 


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64See, for example United States Department of 

Health and Human Services. ‘‘Healthy People 2020: 

Disparities. 2014.’’ Available at: http://

www.healthypeople.gov/2020/about/foundationhealth-measures/Disparities; or National Academies 

of Sciences, Engineering, and Medicine. Accounting 

for Social Risk Factors in Medicare Payment: 

Identifying Social Risk Factors. Washington, DC: 

National Academies of Sciences, Engineering, and 

Medicine 2016. 

65 Department of Health and Human Services 

Office of the Assistant Secretary for Planning and 

Evaluation (ASPE), ‘‘Report to Congress: Social Risk 

Factors and Performance under Medicare’s ValueBased Purchasing Programs.’’ December 2016. 

Available at: https://aspe.hhs.gov/pdf-report/reportcongress-social-risk-factors-and-performanceunder-medicares-value-based-purchasingprograms. 

66Available at http://www.qualityforum.org/SES_

Trial_Period.aspx. 

67Available at: http://www.qualityforum.org/ 

WorkArea/ 

linkit.aspx?LinkIdentifier=id&ItemID=86357. 

consider proposing for public reporting 

in future rulemaking. 

V. Proposed Updates to the Home 

Health Quality Reporting Program (HH 

QRP) 

A. Background and Statutory Authority 

Section 1895(b)(3)(B)(v)(II) of the 

Social Security Act (the Act) requires 

that for 2007 and subsequent years, each 

HHA submit to the Secretary in a form 

and manner, and at a time, specified by 

the Secretary, such data that the 

Secretary determines are appropriate for 

the measurement of health care quality. 

To the extent that an HHA does not 

submit data with respect to a year in 

accordance with this clause, the 

Secretary is directed to reduce the HH 

market basket percentage increase 

applicable to the HHA for such year by 

2 percentage points. As provided at 

section 1895(b)(3)(B)(vi) of the Act, 

depending on the market basket 

percentage increase applicable for a 

particular year, for 2015 and each 

subsequent year (except 2018), the 

reduction of that increase by 2 

percentage points for failure to comply 

with the requirements of the HH QRP 

and further reduction of the increase by 

the productivity adjustment described 

in section 1886(b)(3)(B)(xi)(II) of the Act 

may result in the home health market 

basket percentage increase being less 

than 0.0 percent for a year, and may 

result in payment rates under the Home 

Health PPS for a year being less than 

payment rates for the preceding year. 

For more information on the policies 

we have adopted for the HH QRP, we 

refer readers to the CY 2007 HH PPS 

final rule (71 FR 65888 through 65891), 

the CY 2008 HH PPS final rule (72 FR 

49861 through 49864), the CY 2009 HH 

PPS update notice (73 FR 65356), the 

CY 2010 HH PPS final rule (74 FR 58096 

through 58098), the CY 2011 HH PPS 

final rule (75 FR 70400 through 70407), 

the CY 2012 HH PPS final rule (76 FR 

68574), the CY 2013 HH PPS final rule 

(77 FR 67092), the CY 2014 HH PPS 

final rule (78 FR 72297), the CY 2015 

HH PPS final rule (79 FR 66073 through 

66074), the CY 2016 HH PPS final rule 

(80 FR 68690 through 68695), the CY 

2017 HH PPS final rule (81 FR 76752), 

and the CY 2018 HH PPS final rule (82 

FR 51711 through 51712). 

Although we have historically used 

the preamble to the HH PPS proposed 

and final rules each year to remind 

stakeholders of all previously finalized 

program requirements, we have 

concluded that repeating the same 

discussion each year is not necessary for 

every requirement, especially if we have 

codified it in our regulations. 

Accordingly, the following discussion is 

limited as much as possible to a 

discussion of our proposals for future 

years of the HH QRP, and represents the 

approach we intend to use in our 

rulemakings for this program going 

forward. 

B. General Considerations Used for the 

Selection of Quality Measures for the 

HH QRP 

1. Background 

For a detailed discussion of the 

considerations we historically used for 

measure selection for the HH QRP 

quality, resource use, and others 

measures, we refer readers to the CY 

2016 HH PPS final rule (80 FR 68695 

through 68696). 

2. Accounting for Social Risk Factors in 

the HH QRP Program 

In the CY 2018 HH PPS final rule (82 

FR 51713 through 51714) we discussed 

the importance of improving beneficiary 

outcomes including reducing health 

disparities. We also discussed our 

commitment to ensuring that medically 

complex patients, as well as those with 

social risk factors, receive excellent 

care. We discussed how studies show 

that social risk factors, such as being 

near or below the poverty level as 

determined by HHS, belonging to a 

racial or ethnic minority group, or living 

with a disability, can be associated with 

poor health outcomes and how some of 

this disparity is related to the quality of 

health care.64 Among our core 

objectives, we aim to improve health 

outcomes, attain health equity for all 

beneficiaries, and ensure that complex 

patients as well as those with social risk 

factors receive excellent care. Within 

this context, reports by the Office of the 

Assistant Secretary for Planning and 

Evaluation (ASPE) and the National 

Academy of Medicine have examined 

the influence of social risk factors in our 

value-based purchasing programs.65 As 

we noted in the CY 2018 HH PPS final 

rule (82 FR 51713 through 51714), 

ASPE’s report to Congress, which was 

required by the IMPACT Act, found 

that, in the context of value based 

purchasing programs, dual eligibility 

was the most powerful predictor of poor 

health care outcomes among those 

social risk factors that they examined 

and tested. ASPE is continuing to 

examine this issue in its second report 

required by the IMPACT Act, which is 

due to Congress in the fall of 2019. In 

addition, as we noted in the FY 2018 

IPPS/LTCH PPS final rule (82 FR 38428 

through 38429), the National Quality 

Forum (NQF) undertook a 2-year trial 

period in which certain new measures 

and measures undergoing maintenance 

review have been assessed to determine 

if risk adjustment for social risk factors 

is appropriate for these measures.66 The 

trial period ended in April 2017 and a 

final report is available at: http://

www.qualityforum.org/SES_Trial_

Period.aspx. The trial concluded that 

‘‘measures with a conceptual basis for 

adjustment generally did not 

demonstrate an empirical relationship’’ 

between social risk factors and the 

outcomes measured. This discrepancy 

may be explained in part by the 

methods used for adjustment and the 

limited availability of robust data on 

social risk factors. NQF has extended 

the socioeconomic status (SES) trial,67

allowing further examination of social 

risk factors in outcome measures. 

In the CY 2018/FY 2018 proposed 

rules for our quality reporting and 

value-based purchasing programs, we 

solicited feedback on which social risk 

factors provide the most valuable 

information to stakeholders and the 

methodology for illuminating 

differences in outcomes rates among 

patient groups within a provider that 

would also allow for a comparison of 

those differences, or disparities, across 

providers. Feedback we received across 

our quality reporting programs included 

encouraging CMS to explore whether 

factors could be used to stratify or risk 

adjust the measures (beyond dual 

eligibility), to consider the full range of 

differences in patient backgrounds that 

might affect outcomes, to explore risk 

adjustment approaches, and to offer 

careful consideration of what type of 

information display would be most 

useful to the public. 

We also sought public comment on 

confidential reporting and future public 

reporting of some of our measures 

stratified by patient dual eligibility. In 


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general, commenters noted that 

stratified measures could serve as tools 

for hospitals to identify gaps in 

outcomes for different groups of 

patients, improve the quality of health 

care for all patients, and empower 

consumers to make informed decisions 

about health care. Commenters 

encouraged us to stratify measures by 

other social risk factors such as age, 

income, and educational attainment. 

With regard to value-based purchasing 

programs, commenters also cautioned 

CMS to balance fair and equitable 

payment while avoiding payment 

penalties that mask health disparities or 

discouraging the provision of care to 

more medically complex patients. 

Commenters also noted that value-based 

payment program measure selection, 

domain weighting, performance scoring, 

and payment methodology must 

account for social risk. 

As a next step, we are considering 

options to improve health disparities 

among patient groups within and across 

hospitals by increasing the transparency 

of disparities as shown by quality 

measures. We also are considering how 

this work applies to other CMS quality 

programs in the future. We refer readers 

to the FY 2018 IPPS/LTCH PPS final 

rule (82 FR 38403 through 38409) for 

more details, where we discuss the 

potential stratification of certain 

Hospital IQR Program outcome 

measures. Furthermore, we continue to 

consider options to address equity and 

disparities in our value-based 

purchasing programs. 

We plan to continue working with 

ASPE, the public, and other key 

stakeholders on this important issue to 

identify policy solutions that achieve 

the goals of attaining health equity for 

all beneficiaries and minimizing 

unintended consequences. 

C. Proposed Removal Factors for 

Previously Adopted HH QRP Measures 

As a part of our Meaningful Measures 

Initiative, discussed in section I.D.1 of 

this proposed rule, we strive to put 

patients first, ensuring that they, along 

with their clinicians, are empowered to 

make decisions about their own 

healthcare using data-driven 

information that is increasingly aligned 

with a parsimonious set of meaningful 

quality measures. We began reviewing 

the HH QRP measure set in accordance 

with the Meaningful Measures Initiative 

discussed in section I.D.1 of this 

proposed rule, and we are working to 

identify how to move the HH QRP 

forward in the least burdensome manner 

possible, while continuing to prioritize 

and incentivize improvement in the 

quality of care provided to patients. 

Specifically, we believe the goals of 

the HH QRP and the measures used in 

the program overlap with the 

Meaningful Measures Initiative 

priorities, including making care safer, 

strengthening person and family 

engagement, promoting coordination of 

care, promoting effective prevention and 

treatment, and making care affordable. 

We also evaluated the appropriateness 

and completeness of the HH QRP’s 

current measure removal factors. In the 

CY 2017 HH PPS final rule (81 FR 76754 

through 76755), we adopted a process 

for retaining, removing, and replacing 

previously adopted HH QRP measures. 

To be consistent with other established 

quality reporting programs, we are 

proposing to replace the six criteria 

used when considering a quality 

measure for removal, finalized in the CY 

2017 HH PPS final rule (81 FR 76754 

through 76755), with the following 

seven measure removal factors, finalized 

for the LTCH QRP in the FY 2013 IPPS/ 

LTCH PPS final rule (77 FR 53614 

through 53615), for the SNF QRP in the 

FY 2016 SNF PPS final rule (80 FR 

46431 through 46432), and for the IRF 

QRP in the CY 2013 OPPS/ASC final 

rule (77 FR 68502 through 68503), for 

use in the HH QRP: 

• Factor 1. Measure performance 

among HHAs is so high and unvarying 

that meaningful distinctions in 

improvements in performance can no 

longer be made. 

• Factor 2. Performance or 

improvement on a measure does not 

result in better patient outcomes. 

• Factor 3. A measure does not align 

with current clinical guidelines or 

practice. 

• Factor 4. A more broadly applicable 

measure (across settings, populations, or 

conditions) for the particular topic is 

available. 

• Factor 5. A measure that is more 

proximal in time to desired patient 

outcomes for the particular topic is 

available. 

• Factor 6. A measure that is more 

strongly associated with desired patient 

outcomes for the particular topic is 

available. 

• Factor 7. Collection or public 

reporting of a measure leads to negative 

unintended consequences other than 

patient harm. 

We believe these measure removal 

factors are substantively consistent with 

the criteria we previously adopted (only 

we are changing the terminology to call 

them ‘‘factors’’) and appropriate for use 

in the HH QRP. However, even if one or 

more of the measure removal factors 

applies, we might nonetheless choose to 

retain the measure for certain specified 

reasons. Examples of such instances 

could include when a particular 

measure addresses a gap in quality that 

is so significant that removing the 

measure could result in poor quality, or 

in the event that a given measure is 

statutorily required. Furthermore, we 

note that consistent with other quality 

reporting programs, we apply these 

factors on a case-by-case basis. 

We finalized in the CY 2017 HH PPS 

final rule (81 FR 76755) that removal of 

a HH QRP measure would take place 

through notice and comment 

rulemaking, unless we determined that 

a measure was causing concern for 

patient safety. Specifically, in the case 

of a HH QRP measure for which there 

was a reason to believe that the 

continued collection raised possible 

safety concerns, we would promptly 

remove the measure and publish the 

justification for the removal in the 

Federal Register during the next 

rulemaking cycle. In addition, we would 

immediately notify HHAs and the 

public through the usual 

communication channels, including 

listening sessions, memos, email 

notification, and Web postings. If we 

removed a measure from the HH QRP 

under these circumstances but also 

collected data on that measure under 

different statutory authority for a 

different purpose, we would notify 

stakeholders that we would also cease 

collecting the data under that alternative 

statutory authority. 

In this proposed rule, we are 

proposing to adopt an additional factor 

to consider when evaluating potential 

measures for removal from the HH QRP 

measure set: 

• Factor 8. The costs associated with 

a measure outweigh the benefit of its 

continued use in the program. 

As we discussed in section I.D.1 of 

this proposed rule, with respect to our 

new Meaningful Measures Initiative, we 

are engaging in efforts to ensure that the 

HH QRP measure set continues to 

promote improved health outcomes for 

beneficiaries while minimizing the 

overall costs associated with the 

program. We believe these costs are 

multifaceted and include not only the 

burden associated with reporting, but 

also the costs associated with 

implementing and maintaining the 

program. We have identified several 

different types of costs, including, but 

not limited to the following: 

• Provider and clinician information 

collection burden and burden associated 

with the submitting/reporting of quality 

measures to CMS. 

• The provider and clinician cost 

associated with complying with other 

HH programmatic requirements. 


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• The provider and clinician cost 

associated with participating in 

multiple quality programs, and tracking 

multiple similar or duplicative 

measures within or across those 

programs. 

• The cost to CMS associated with the 

program oversight of the measure, 

including measure maintenance and 

public display. 

• The provider and clinician cost 

associated with compliance with other 

federal and state regulations (if 

applicable). 

For example, it may be of limited 

benefit to retain or maintain a measure 

which our analyses show no longer 

meaningfully supports program 

objectives (for example, informing 

beneficiary choice). It may also be costly 

for HHAs to track confidential feedback, 

preview reports, and publicly reported 

information on a measure where we use 

the measure in more than one program. 

We may also have to expend resources 

to maintain the specifications for the 

measure, including the tools needed to 

collect, validate, analyze, and publicly 

report the measure data. 

When these costs outweigh the 

evidence supporting the continued use 

of a measure in the HH QRP, we believe 

it may be appropriate to remove the 

measure from the program. Although we 

recognize that one of the main goals of 

the HH QRP is to improve beneficiary 

outcomes by incentivizing health care 

providers to focus on specific care 

issues and making public data related to 

those issues, we also recognize that 

those goals can have limited utility 

where, for example, the publicly 

reported data is of limited use because 

it cannot be easily interpreted by 

beneficiaries and used to influence their 

choice of providers. In these cases, 

removing the measure from the HH QRP 

may better accommodate the costs of 

program administration and compliance 

without sacrificing improved health 

outcomes and beneficiary choice. 

We are proposing that we would 

remove measures based on proposed 

Factor 8 on a case-by-case basis. For 

example, we may decide to retain a 

measure that is burdensome for HHAs to 

report if we conclude that the benefit to 

beneficiaries is so high that it justifies 

the reporting burden. Our goal is to 

move the HH QRP program forward in 

the least burdensome manner possible, 

while maintaining a parsimonious set of 

meaningful quality measures and 

continuing to incentivize improvement 

in the quality of care provided to 

patients. 

We are inviting public comment on 

our proposals to replace the six criteria 

used when considering a quality 

measure for removal with the seven 

measure removal factors currently 

adopted in the LTCH QRP, IRF QRP, 

and SNF QRP. We are also inviting 

public comment on our proposal to 

adopt new measure removal Factor 8. 

The costs associated with a measure 

outweigh the benefit of its continued 

use in the program. 

D. Quality Measures Currently Adopted 

for the HH QRP 

The HH QRP currently has 31 

measures for the CY 2020 program year, 

as outlined in Table 54. 

TABLE 54—MEASURES CURRENTLY ADOPTED FOR THE CY 2020 HH QRP 

Short name Measure name & data source 

OASIS-Based 

Ambulation ..................................................... Improvement in Ambulation/Locomotion (NQF #0167). 

Application of Falls ........................................ Application of Percent of Residents Experiencing One or More Falls with Major Injury (Long Stay) 

(NQF #0674). 

Application of Functional Assessment .......... Application of Percent of Long-Term Care Hospital (LTCH) Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function (NQF #2631). 

Bathing .......................................................... Improvement in Bathing (NQF #0174). 

Bed Transferring ............................................ Improvement in Bed Transferring (NQF #0175). 

Depression Assessment ................................ Depression Assessment Conducted. 

Diabetic Foot Care ........................................ Diabetic Foot Care and Patient/Caregiver Education Implemented during All Episodes of Care 

(#0519). 

DRR ............................................................... Drug Regimen Review Conducted With Follow-Up for Identified Issues—Post Acute Care (PAC) 

HH QRP. 

Drug Education .............................................. Drug Education on All Medications Provided to Patient/Caregiver during All Episodes of Care. 

Dyspnea ........................................................ Improvement in Dyspnea. 

Falls Risk ....................................................... Multifactor Fall Risk Assessment Conducted For All Patients Who Can Ambulate (NQF #0537). 

Influenza ........................................................ Influenza Immunization Received for Current Flu Season (NQF #0522). 

Oral Medications ........................................... Improvement in Management of Oral Medications (NQF #0176). 

Pain ............................................................... Improvement in Pain Interfering with Activity (NQF #0177). 

PPV ............................................................... Pneumococcal Polysaccharide Vaccine Ever Received. 

Pressure Ulcer/Injury ..................................... Percent of Residents or Patients With Pressure Ulcers That Are New or Worsened (Short Stay) 

(NQF #0678), removed as of January 1, 2019. 

Changes in Skin Integrity Post-Acute Care: Pressure Ulcer/Injury measure, effective January 1, 

2019. 

Surgical Wounds ........................................... Improvement in Status of Surgical Wounds (NQF #0178). 

Timely Care ................................................... Timely Initiation Of Care (NQF #0526). 

Claims-Based 

ACH ............................................................... Acute Care Hospitalization During the First 60 Days of HH (NQF #0171). 

DTC ............................................................... Discharge to Community-Post Acute Care (PAC) Home Health (HH) Quality Reporting Program 

(QRP). 

ED Use .......................................................... Emergency Department Use without Hospitalization During the First 60 Days of HH (NQF #0173). 

ED Use without Readmission ....................... Emergency Department Use without Hospital Readmission During the First 30 Days of HH (NQF 

#2505). 

MSPB ............................................................ Total Estimated Medicare Spending Per Beneficiary (MSPB)—Post Acute Care (PAC) HH QRP. 

PPR ............................................................... Potentially Preventable 30-Day Post-Discharge Readmission Measure for HH Quality Reporting 

Program. 


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68Beekman A.T., Deeg D.J., Braam A.W., et al.: 

Consequences of major and minor depression in 

later life: A study of disability, well-being and 

service utilization. Psychological Medicine 

27:1397–1409, 1997. 

69Schulz, R., Beach, S.R., Ives, D.G., Martire, 

L.M., Ariyo, A.A., & Kop, W.J. (2000). Association 

between depression and mortality in older adults— 

The Cardiovascular Health Study. Archives of 

Internal Medicine, 160(12), 1761–1768. 

70Measure specifications can be found in the 

Home Health Process Measures Table on the Home 

Health Quality Measures website (https://

www.cms.gov/Medicare/Quality-Initiatives-PatientAssessment-Instruments/HomeHealthQualityInits/ 

Downloads/Home-Health-Process-Measures-Table_

OASIS-C2_4-11-18.pdf). 

71The OASIS-based HH QRP outcome measures 

that use OASIS Item M1730 as a risk adjuster in the 

calculation of the measure are: Improvement in 

Bathing (NQF #0174), Improvement in Bed 

Transferring (NQF #0175), Improvement in 

Ambulation/Locomotion (NQF #0167), 

Improvement in Dyspnea, Improvement in Pain 

Interfering with Activity (NQF #0177), 

Improvement in Management of Oral Medications 

(NQF #0176), and Improvement in Status of 

Surgical Wounds (NQF #0178). 

72The truncated coefficient of variation (TCV) is 

the ratio of the standard deviation to the mean of 

the distribution of all scores, excluding the 5 

percent most extreme scores. A small TCV (≤ 0.1) 

indicates that the distribution of individual scores 

is clustered tightly around the mean value, 

suggesting that it is not useful to draw distinctions 

between individual performance scores. 

73The OASIS-based HH QRP outcome measures 

that use OASIS Item M1730 as a risk adjuster in the 

calculation of the measure are: Improvement in 

Bathing (NQF #0174), Improvement in Bed 

Transferring (NQF #0175), Improvement in 

Ambulation/Locomotion (NQF #0167), 

Improvement in Dyspnea, Improvement in Pain 

Interfering with Activity (NQF #0177), 

Improvement in Management of Oral Medications 

(NQF #0176), and Improvement in Status of 

Surgical Wounds (NQF #0178). 

TABLE 54—MEASURES CURRENTLY ADOPTED FOR THE CY 2020 HH QRP—Continued 

Short name Measure name & data source 

Rehospitalization ........................................... Rehospitalization During the First 30 Days of HH (NQF #2380). 

HHCAHPS-Based 

Communication .............................................. How well did the home health team communicate with patients. 

Overall Rating ................................................ How do patients rate the overall care from the home health agency. 

Professional Care .......................................... How often the home health team gave care in a professional way. 

Team Discussion ........................................... Did the home health team discuss medicines, pain, and home safety with patients. 

Willing to Recommend .................................. Will patients recommend the home health agency to friends and family. 

E. Proposed Removal of HH QRP 

Measures Beginning With the CY 2021 

HH QRP 

To address the Meaningful Measures 

Initiative described in section I.D.1 of 

this proposed rule, we are proposing to 

remove seven measures from the HH 

QRP beginning with the CY 2021 HH 

QRP. 

1. Proposed Removal of the Depression 

Assessment Conducted Measure 

We are proposing to remove the 

Depression Assessment Conducted 

Measure from the HH QRP beginning 

with the CY 2021 HH QRP under our 

proposed Factor 1. Measure 

performance among HHAs is so high 

and unvarying that meaningful 

distinctions in improvements in 

performance can no longer be made. 

In the CY 2010 HH PPS final rule (74 

FR 58096 through 58098), we adopted 

the Depression Assessment Conducted 

Measure beginning with the CY 2010 

HH QRP. Depression in the elderly is 

associated with disability, impaired 

well-being, service utilization,68 and 

mortality.69 This process measure 

reports the percentage of HH episodes in 

which patients were screened for 

depression (using a standardized 

depression screening tool) at start of 

care/resumption of care (SOC/ROC). 

The measure is calculated solely using 

the OASIS Item M1730, Depression 

Screening.70 Item M1730 is additionally 

used at SOC/ROC as a risk adjuster in 

the calculation of several other OASISbased outcome measures currently 

adopted for the HH QRP.71

In our evaluation of the Depression 

Assessment Conducted Measure, we 

found that HHA performance is very 

high and that meaningful distinctions in 

improvements in performance cannot be 

made. The mean and median agency 

performance scores for this measure in 

2017 (96.8 percent and 99.2 percent, 

respectively) when compared to the 

mean and median agency performance 

scores for this measure in 2010 (88.0 

percent and 96.6 percent, respectively) 

indicate that an overwhelming majority 

of patients are screened for depression 

in the HH setting. Further, these 

performance scores demonstrate the 

improvement in measure performance 

since its adoption in the HH QRP. In 

addition, in 2017 the 75th percentile 

measure score (100 percent) and the 

90th percentile measure score (100 

percent) are statistically 

indistinguishable from each other, 

meaning that the measure scores do not 

meaningfully distinguish scores 

between HHAs. Further, the Truncated 

Coefficient of Variation (TCV) 72 for this 

measure is 0.03, suggesting that it is not 

useful to draw distinctions between 

individual agency performance scores 

for this measure. 

For these reasons, we are proposing to 

remove the Depression Assessment 

Conducted Measure from the HH QRP 

beginning with the CY 2021 HH QRP 

under our proposed Factor 1. Measure 

performance among HHAs is so high 

and unvarying that meaningful 

distinctions in improvements in 

performance can no longer be made. 

If finalized as proposed, HHAs would 

no longer be required to submit OASIS 

Item M1730, Depression Screening at 

SOC/ROC for the purposes of this 

measure beginning January 1, 2020. 

HHAs would however continue to 

submit data on M1730 at the time point 

of SOC/ROC as a risk adjuster for 

several other OASIS-based outcome 

measures currently adopted for the HH 

QRP.73 If finalized as proposed, data for 

this measure would be publicly reported 

on HH Compare until January 2021. 

We are inviting public comment on 

this proposal. 

2. Proposed Removal of the Diabetic 

Foot Care and Patient/Caregiver 

Education Implemented During All 

Episodes of Care Measure 

We are proposing to remove the 

Diabetic Foot Care and Patient/Caregiver 

Education Implemented during All 

Episodes of Care Measure from the HH 

QRP beginning with the CY 2021 HH 

QRP under our proposed Factor 1. 

Measure performance among HHAs is so 

high and unvarying that meaningful 

distinctions in improvements in 

performance can no longer be made. 

In the CY 2010 HH PPS final rule (74 

FR 58096 through 58098), we adopted 

the Diabetic Foot Care and Patient/ 

Caregiver Education Implemented 

during All Episodes of Care Measure 

beginning with the CY 2010 HH QRP. 

This process measure reports the 

percentage of HH quality episodes in 

which diabetic foot care and patient/ 

caregiver education were included in 

the physician-ordered plan of care and 


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74Measure specifications can be found in the 

Home Health Process Measures Table on the Home 

Health Quality Measures website (https://

www.cms.gov/Medicare/Quality-Initiatives-PatientAssessment-Instruments/HomeHealthQualityInits/ 

Downloads/Home-Health-Process-Measures-Table_

OASIS-C2_4-11-18.pdf). 

75At the time, this measure was adopted as ‘‘Falls 

risk assessment for patients 65 and older.’’ The 

name of this measure was updated in the CY 2018 

HH PPS final rule (82 FR 51717). 

76Measure specifications can be found in the 

Home Health Process Measures Table on the Home 

Health Quality Measures website (https://

www.cms.gov/Medicare/Quality-Initiatives-PatientAssessment-Instruments/HomeHealthQualityInits/ 

Downloads/Home-Health-Process-Measures-Table_

OASIS-C2_4-11-18.pdf). 

77Measure specifications can be found in the 

Home Health Process Measures Table on the Home 

Health Quality Measures website (https://

www.cms.gov/Medicare/Quality-Initiatives-PatientAssessment-Instruments/HomeHealthQualityInits/ 

Downloads/Home-Health-Process-Measures-Table_

OASIS-C2_4-11-18.pdf). 

78The Advisory Committee on Immunization 

Practices was established under section 222 of the 

Public Health Service Act (42 U.S.C. 2l7a), as 

Continued 

implemented (at the time of or at any 

time since the most recent SOC/ROC 

assessment). The measure numerator is 

calculated using OASIS Item M2401 

row a, Intervention Synopsis: Diabetic 

foot care.74

In our evaluation of the Diabetic Foot 

Care and Patient/Caregiver Education 

Implemented during All Episodes of 

Care Measure, we found that HHA 

performance is very high and that 

meaningful distinctions in 

improvements in performance cannot be 

made. The mean and median agency 

performance scores for this measure in 

2017 (97.0 percent and 99.2 percent, 

respectively) when compared to the 

mean and median agency performance 

score for this measure in 2010 (86.2 

percent and 91.7 percent, respectively), 

indicate that an overwhelming majority 

of HH episodes for patients with 

diabetes included education on foot 

care. Further, these scores demonstrate 

the improvement in measure 

performance since the Diabetic Foot 

Care and Patient/Caregiver Education 

Implemented during All Episodes of 

Care Measure’s adoption in the HH 

QRP. In addition, in 2017 the 75th 

percentile measure score (100 percent) 

and the 90th percentile score (100 

percent) are statistically 

indistinguishable from each other, 

meaning that the measure scores do not 

meaningfully distinguish between 

HHAs. Further, the TCV for this 

measure is 0.03, suggesting that it is not 

useful to draw distinctions between 

individual agency performance scores 

for this measure. 

For these reasons, we are proposing to 

remove the Diabetic Foot Care and 

Patient/Caregiver Education 

Implemented during All Episodes of 

Care Measure from the HH QRP 

beginning with CY 2021 HH QRP under 

our proposed Factor 1. Measure 

performance among HHAs is so high 

and unvarying that meaningful 

distinctions in improvements in 

performance can no longer be made. 

If finalized as proposed, HHAs would 

no longer be required to submit OASIS 

Item M2401 row a, Intervention 

Synopsis: Diabetic foot care at the time 

point of Transfer to an Inpatient Facility 

(TOC) and Discharge from Agency—Not 

to an Inpatient Facility (Discharge) for 

the purposes of the HH QRP beginning 

January 1, 2020. HHAs may enter an 

equal sign (=) for M2401, row a, at the 

time point of TOC and Discharge on or 

after January 1, 2020. If finalized as 

proposed, data for this measure would 

be publicly reported on HH Compare 

until January 2021. 

We are inviting public comment on 

this proposal. 

3. Proposed Removal of the Multifactor 

Fall Risk Assessment Conducted for All 

Patients Who Can Ambulate (NQF 

#0537) Measure 

We are proposing to remove the 

Multifactor Fall Risk Assessment 

Conducted for All Patients Who Can 

Ambulate (NQF #0537) Measure from 

the HH QRP beginning with the CY 

2021 HH QRP, under our proposed 

Factor 1. Measure performance among 

HHAs is so high and unvarying that 

meaningful distinctions in 

improvements in performance can no 

longer be made. 

In CY 2010 HH PPS final rule (74 FR 

58096 through 58098), we adopted the 

Multifactor Fall Risk Assessment 

Conducted for All Patients Who Can 

Ambulate (NQF #0537) Measure 75

beginning with the CY 2010 HH QRP. 

This process measure reports the 

percentage of HH quality episodes in 

which patients had a multifactor fall 

risk assessment at SOC/ROC. The 

measure is calculated using OASIS Item 

M1910, Falls Risk Assessment.76

In our evaluation of the Multifactor 

Fall Risk Assessment Conducted for All 

Patients Who Can Ambulate (NQF 

#0537) Measure, we found that HHA 

performance is very high and that 

meaningful distinctions in 

improvements in performance cannot be 

made. The mean and median agency 

performance scores for this measure in 

2017 (99.3 percent and 100.0 percent, 

respectively) when compared to the 

mean and median agency performance 

score for this measure in 2010 (94.8 

percent and 98.9 percent, respectively), 

indicate that an overwhelming majority 

of patients in an HHA have had a 

multifactor fall risk assessment at SOC/ 

ROC and demonstrates the improvement 

in measure performance since its 

adoption. In addition, in 2017 the 75th 

percentile measure score (100 percent) 

and the 90th percentile measure score 

(100 percent) are statistically 

indistinguishable from each other, 

meaning that the measure scores do not 

meaningfully distinguish between 

HHAs. Further, the TCV for this 

measure is 0.01, suggesting that it is not 

useful to draw distinctions between 

individual agency performance scores 

for this measure. 

For these reasons, we are proposing to 

remove the Multifactor Fall Risk 

Assessment Conducted for All Patients 

Who Can Ambulate (NQF #0537) 

Measure from the HH QRP beginning 

with the CY 2021 HH QRP, under our 

proposed Factor 1. Measure 

performance among HHAs is so high 

and unvarying that meaningful 

distinctions in improvements in 

performance can no longer be made. 

If finalized as proposed, HHAs would 

no longer be required to submit OASIS 

Item M1910, Falls Risk Assessment at 

SOC/ROC beginning January 1, 2020. 

HHAs may enter an equal sign (=) for 

M1910 at the time point of SOC and 

ROC beginning January 1, 2020. If 

finalized as proposed, data for this 

measure would be publicly reported on 

HH Compare until January 2021. 

We are inviting public comment on 

this proposal. 

4. Proposed Removal of the 

Pneumococcal Polysaccharide Vaccine 

Ever Received Measure 

We are proposing to remove the 

Pneumococcal Polysaccharide Vaccine 

Ever Received Measure from the HH 

QRP beginning with the CY 2021 HH 

QRP, under our proposed Factor 3. A 

measure does not align with current 

clinical guidelines or practice. 

In the CY 2010 HH PPS final rule (74 

FR 58096 through 58098), we adopted 

the Pneumococcal Polysaccharide 

Vaccine Ever Received Measure 

beginning with CY 2010 HH QRP. This 

process measure reports the percentage 

of HH quality episodes during which 

patients were determined to have ever 

received the Pneumococcal 

Polysaccharide Vaccine. The measure is 

calculated using OASIS Items M1051, 

Pneumococcal Vaccine and M1056, 

Reason Pneumococcal Vaccine not 

received.77

At the time that this measure was 

adopted in the HH QRP, the Advisory 

Committee on Immunization Practices 

(ACIP),78 which sets current clinical 


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amended, to assist states and their political 

subdivisions in the prevention and control of 

communicable diseases; to advise the states on 

matters relating to the preservation and 

improvement of the public’s health; and to make 

grants to states and, in consultation with the state 

health authorities, to agencies and political 

subdivisions of states to assist in meeting the costs 

of communicable disease control programs. (Charter 

of the Advisory Committee on Immunization 

Practices, filed April 1, 2018. https://www.cdc.gov/ 

vaccines/acip/committee/ACIP-Charter-2018.pdf.) 

79Prevention of Pneumococcal Disease: 

Recommendations of the Advisory Committee on 

Immunization Practices (ACIP), MMWR 1997;46:1– 

24. 

80Tomczyk S., Bennett N.M., Stoecker C., et al. 

Use of 13-valent pneumococcal conjugate vaccine 

and 23-valent pneumococcal polysaccharide 

vaccine among adults aged ≥65 years: 

recommendations of the Advisory Committee on 

Immunization Practices (ACIP). MMWR 2014;63: 

822–5. 

81Measure specifications can be found in the 

Home Health Outcomes Measures Table on the 

Home Health Quality Measures website (https://

www.cms.gov/Medicare/Quality-Initiatives-PatientAssessment-Instruments/HomeHealthQualityInits/ 

Downloads/Home-Health-Outcome-MeasuresTable-OASIS-C2_4-11-18.pdf). 

82The OASIS-based HH QRP outcome measures 

that use OASIS Items M1340 and M1342 as a risk 

adjuster in the calculation of the measure are: 

Improvement in Bathing (NQF #0174), 

Improvement in Bed Transferring (NQF #0175), 

Improvement in Ambulation/Locomotion (NQF 

#0167), Improvement in Dyspnea, Improvement in 

Pain Interfering with Activity (NQF #0177), and 

Improvement in Management of Oral Medications 

(NQF #0176). 

83Measure specifications can be found in the 

Home Health Potentially Avoidable Events 

Measures Table on the Home Health Quality 

Measures website (https://www.cms.gov/Medicare/ 

Quality-Initiatives-Patient-Assessment-Instruments/ 

HomeHealthQualityInits/Downloads/Home-HealthPAE-Measures-Table-OASIS-C2_4-11-18.pdf). 

84To be replaced with a modified version of that 

measure, Changes in Skin Integrity Post-Acute Care: 

Pressure Ulcer/Injury, beginning with the CY 2020 

HH QRP. 

85The OASIS-based HH QRP outcome measures 

that use OASIS Items M1340 and M1342 as a risk 

adjuster in the calculation of the measure are: 

Improvement in Bathing (NQF #0174), 

Improvement in Bed Transferring (NQF #0175), 

guidelines, recommended use of a single 

dose of the 23-valent pneumococcal 

polysaccharide vaccine (PPSV23) among 

all adults aged 65 years and older and 

those adults aged 19 to 64 years with 

underlying medical conditions that put 

them at greater risk for serious 

pneumococcal infection.79

Since this measure was added to the 

HH QRP, the ACIP has updated its 

pneumococcal vaccination 

recommendations.80 Two pneumococcal 

vaccines are currently licensed for use 

in the United States: the 13-valent 

pneumococcal conjugate vaccine 

(PCV13) and the 23-valent 

pneumococcal vaccine (PPSV23). The 

ACIP currently recommends that both 

PCV13 and PPSV23 be given to all 

immunocompetent adults aged ≥ 65 

years. The recommended intervals for 

sequential administration of PCV13 and 

PPSV23 depend on several patient 

factors including: The current age of the 

adult, whether the adult had previously 

received PPSV23, and the age of the 

adult at the time of prior PPSV23 

vaccination (if applicable). 

The specifications for the 

Pneumococcal Polysaccharide Vaccine 

Ever Received Measure do not fully 

reflect the current ACIP guidelines. 

Therefore, we believe that the 

Pneumococcal Polysaccharide Vaccine 

Ever Received Measure no longer aligns 

with the current clinical guidelines or 

practice. For this reason, we are 

proposing to remove the Pneumococcal 

Polysaccharide Vaccine Ever Received 

Measure from the HH QRP beginning 

with the CY 2021 HH QRP under our 

proposed Factor 3. A measure does not 

align with current clinical guidelines or 

practice. 

If finalized as proposed, HHAs would 

no longer be required to submit OASIS 

Items M1051, Pneumococcal Vaccine 

and M1056, Reason Pneumococcal 

Vaccine not received at the time point 

of TOC and Discharge for the purposes 

of the HH QRP beginning January 1, 

2020. HHAs may enter an equal sign (=) 

for Items M1051 and M1056 at the time 

point of TOC and Discharge on or after 

January 1, 2020. If finalized as 

proposed, data for this measure would 

be publicly reported on HH Compare 

until January 2021. 

We are inviting public comment on 

this proposal. 

5. Proposed Removal of the 

Improvement in the Status of Surgical 

Wounds Measure 

We are proposing to remove the 

Improvement in the Status of Surgical 

Wounds Measure from the HH QRP 

beginning with the CY 2021 HH QRP 

under our proposed Factor 4. A more 

broadly applicable measure (across 

settings, populations, or conditions) for 

the particular topic is available. 

In the CY 2008 HH PPS final rule (72 

FR 49861 through 49863), we adopted 

the Improvement in the Status of 

Surgical Wounds Measure for the HH 

QRP beginning with the CY 2008 

program year. This risk-adjusted 

outcome measure reports the percentage 

of HH episodes of care during which the 

patient demonstrates an improvement in 

the condition of skin integrity related to 

the surgical wounds. This measure is 

solely calculated using OASIS Items 

M1340, Does this patient have a 

Surgical Wound? and M1342, Status of 

Most Problematic Surgical Wound that 

is Observable.81 Items M1340 and 

M1342 are also used at the time points 

of SOC/ROC as risk adjusters in the 

calculation of several other OASISbased outcome measures currently 

adopted for the HH QRP 82 Additionally, 

Items M1340 and M1342 are used at the 

time point of Discharge for the 

Potentially Avoidable Events measure 

Discharged to the Community Needing 

Wound Care or Medication Assistance 

that is used by HH surveyors during the 

survey process.83

The Improvement in the Status of 

Surgical Wounds Measure is limited in 

scope to surgical wounds incurred by 

surgical patients and excludes HH 

episodes of care where the patient, at 

SOC/ROC, did not have any surgical 

wounds or had only a surgical wound 

that was unobservable or fully 

epithelialized. As a result, the majority 

of HHAs are not able to report data on 

the measure and the measure is limited 

in its ability to compare how well HHAs 

address skin integrity. For example, in 

2016, only 13 percent of HH patients 

had a surgical wound at the beginning 

of their HH episode and only 36.6 

percent of HHAs were able to report 

data on the measure with respect to that 

year. 

In contrast, the Percent of Residents 

or Patients with Pressure Ulcers That 

Are New or Worsened (Short Stay) 

Measure (NQF #0678) 84 and its 

replacement measure, Changes in Skin 

Integrity Post-Acute Care: Pressure 

Ulcer/Injury Measure more broadly 

assess the quality of care furnished by 

HHAs with respect to skin integrity. 

These measures encourage clinicians to 

assess skin integrity in the prevention of 

pressure ulcers, as well as to monitor 

and promote healing in all HH patients, 

not just those with surgical wounds. 

Therefore, we are proposing to 

remove the Improvement in the Status 

of Surgical Wounds Measure from the 

HH QRP beginning with the CY 2021 

HH QRP under our proposed Factor 4. 

A more broadly applicable measure 

(across settings, populations, or 

conditions) for the particular topic is 

available. 

If finalized as proposed, HHAs would 

no longer be required to submit OASIS 

Items M1340, Does this patient have a 

Surgical Wound? and M1342, Status of 

Most Problematic Surgical Wound that 

is Observable at the time points of SOC/ 

ROC and Discharge for the purposes of 

this measure beginning with January 1, 

2020 episodes of care. However, HHAs 

would still be required to submit data 

on Items M1340 and M1342 at the time 

point of SOC/ROC as risk adjusters for 

several other OASIS-based outcome 

measures currently adopted for the HH 

QRP,85 and also at the time point of 


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Improvement in Ambulation/Locomotion (NQF 

#0167), Improvement in Dyspnea, Improvement in 

Pain Interfering with Activity (NQF #0177), and 

Improvement in Management of Oral Medications 

(NQF #0176). 

86Measure specifications can be found in the 

Home Health Potentially Avoidable Events 

Measures Table on the Home Health Quality 

Measures website (https://www.cms.gov/Medicare/ 

Quality-Initiatives-Patient-Assessment-Instruments/ 

HomeHealthQualityInits/Downloads/Home-HealthPAE-Measures-Table-OASIS-C2_4-11-18.pdf). 

87All-Cause Admissions and Readmissions 2015– 

2017 Technical Report, National Quality Forum, 

Washington DC, 2017. (http://

www.qualityforum.org/WorkArea/linkit.aspx?

LinkIdentifier=id&ItemID=85033) page 20. 

Discharge for the Potentially Avoidable 

Events measure Discharged to the 

Community Needing Wound Care or 

Medication Assistance 86 that is used by 

HH surveyors during the survey process. 

If finalized as proposed, data on this 

measure would be publicly reported on 

HH Compare until January 2021. 

We are inviting public comment on 

this proposal. 

6. Proposed Removal of the Emergency 

Department Use Without Hospital 

Readmission During the First 30 Days of 

HH (NQF #2505) Measure 

We are proposing to remove the 

Emergency Department (ED) Use 

without Hospital Readmission during 

the First 30 Days of HH (NQF #2505) 

Measure from the HH QRP beginning 

with the CY 2021 HH QRP, under our 

proposed Factor 4. A more broadly 

applicable measure (across settings, 

populations, or conditions) for the 

particular topic is available). 

In the CY 2014 HH PPS final rule (78 

FR 72298 through 72301), we adopted 

the claims-based ED Use without 

Hospital Readmission during the first 30 

days of HH (NQF #2505) Measure 

beginning with CY 2014 HH QRP. The 

particular topic for this measure is ED 

utilization, as it estimates the riskstandardized rate of ED use without 

acute care hospital admission during the 

30 days following the start of the HH 

stay for patients with an acute inpatient 

hospitalization in the 5 days before the 

start of their HH stay. The ED Use 

without Hospital Readmission during 

the First 30 Days of HH (NQF #2505) 

Measure is limited to Medicare FFS 

patients with a prior, proximal inpatient 

stay. Recent analyses from 2016 and 

2017 show that this measure annually 

captured approximately 2.5 million 

(25.1 percent in 2016 and 25.1 percent 

in 2017) of Medicare FFS HH stays and 

was reportable for less than two-thirds 

of the HHAs (62.1 percent in 2016 and 

62.6 percent in 2017). 

The ED Use without Hospitalization 

During the First 60 Days of HH (NQF 

#0173) Measure also addresses the topic 

of ED utilization during a HH stay. This 

measure reports the percentage of 

Medicare FFS HH stays in which 

patients used the ED but were not 

admitted to the hospital during the 60 

days following the start of the HH stay. 

The ED Use without Hospitalization 

during the First 60 days of HH (NQF 

#0173) Measure includes Medicare FFS 

patients irrespective of whether or not 

they had an acute inpatient 

hospitalization in the five days prior to 

the start of the HH stay and spans the 

first 60 days of a HH episode. Recent 

analyses using 2016 and 2017 data show 

this measure annually captures 

approximately 8.3 million stays (81.9 

percent in 2016 and 81.8 percent in 

2017) and is reportable by a greater 

number of HHAs (88.8 percent in 2016 

and 88.1 percent in 2017) than the ED 

Use without Hospital Readmission 

During the First 30 Days of HH (NQF 

#2505) Measure. 

The ED Use without Hospital 

Readmission During the First 30 Days of 

HH (NQF #2505) Measure addresses 

outcomes of Medicare FFS patients for 

a 30-day interval after the start of their 

HH care, regardless of the length of their 

HH stay. The more broadly applicable 

ED Use without Hospitalization during 

the First 60 days of HH (NQF #0173) 

Measure addresses these same outcomes 

for a greater number of Medicare FFS 

patients during the first 60 days of a HH 

stay and includes the 30-day interval of 

the ED Use without Hospital 

Readmission During the First 30 Days of 

HH (NQF #2505) Measure. The measure 

specifications for both measures are 

otherwise harmonized along several 

measure dimensions, including data 

source, population, denominator 

exclusions, numerator, and risk 

adjustment methodology. As a result, 

removing the ED Use without Hospital 

Readmission During the First 30 Days of 

HH (NQF #2505) Measure in favor of the 

ED Use without Hospitalization during 

the First 60 days of HH (NQF #173) 

Measure will not result in a loss of the 

ability to measure the topic of ED 

utilization for HH patients. 

For these reasons, we are proposing to 

remove the ED Use without Hospital 

Readmission During the First 30 Days of 

HH (NQF #2505) Measure from the HH 

QRP beginning with the CY 2021 HH 

QRP under our proposed Factor 4. A 

more broadly applicable measure 

(across settings, populations, or 

conditions) for the particular topic is 

available. If finalized as proposed, data 

for this measure would be reported on 

HH Compare until January 2020. 

We are inviting public comment on 

this proposal. 

7. Proposed Removal of the 

Rehospitalization During the First 30 

Days of HH (NQF #2380) Measure 

We are proposing to remove the 

Rehospitalization during the First 30 

Days of HH (NQF #2380) Measure from 

the HH QRP beginning with the CY 

2021 HH QRP, under our proposed 

Factor 4. A more broadly applicable 

measure (across settings, populations, or 

conditions) for the particular topic is 

available. 

In the CY 2014 HH PPS final rule (78 

FR 72297 through 72301), we adopted 

the claims-based Rehospitalization 

during the first 30 Days of HH Measure 

beginning with the CY 2014 HH QRP. 

The measure was NQF-endorsed (NQF 

#2380) in December 2014. The 

Rehospitalization during the first 30 

Days of HH (NQF #2380) Measure 

addresses the particular topic of acute 

care hospital utilization during a HH 

stay. This measure estimates the riskstandardized rate of unplanned, allcause hospital readmissions for patients 

who had an acute inpatient 

hospitalization in the 5 days before the 

start of their HH stay and were admitted 

to an acute care hospital during the 30 

days following the start of the HH stay 

(78 FR 72297 through 72301). The 

Rehospitalization During the First 30 

Days of HH (NQF #2380) Measure only 

includes Medicare FFS patients. Recent 

analyses from 2016 and 2017 show that 

this measure annually captured 

approximately 2.5 million (25.1 percent 

in 2016 and 25.1 percent in 2017) of 

Medicare FFS HH stays and was 

reportable for less than two-thirds of the 

HHAs (62.1 percent in 2016 and 62.6 

percent in 2017). 

In the CY 2013 HH PPS final rule (77 

FR 67093 through 67094), we finalized 

the claims-based Acute Care 

Hospitalization Measure. The measure’s 

title was later updated to Acute Care 

Hospitalization During the First 60 Days 

of HH (NQF #0171) to improve clarity.87

The Acute Care Hospitalization During 

the First 60 Days of HH (NQF #0171) 

Measure also addresses the topic of 

acute care hospital utilization during a 

HH stay. This measure reports the 

percentage of HH stays in which 

Medicare FFS patients were admitted to 

an acute care hospital during the 60 

days following the start of the HH stay. 

The Acute Care Hospitalization during 

the First 60 Days of HH (NQF #0171) 

Measure includes Medicare FFS 

patients irrespective of whether or not 


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they had an acute inpatient 

hospitalization in the five days prior to 

the start of the HH stay and spans the 

first 60 days of a HH episode. Recent 

analyses using 2016 and 2017 data show 

this measure annually captures 

approximately 8.3 million stays (81.9 

percent in 2016 and 81.8 percent in 

2017) and is reportable by a greater 

number of HHAs (88.8 percent in 2016 

and 88.1 percent in 2017) than the 

Rehospitalization during the First 30 

Days of HH (NQF #2380) Measure. 

The Rehospitalization during the First 

30 Days of HH (NQF #2380) Measure 

addresses outcomes of Medicare FFS 

patients for a 30-day interval after the 

start of their HH care, regardless of the 

length of their HH stay. In contrast, the 

Acute Care Hospitalization During the 

First 60 Days of HH (NQF #0171) 

Measure is broader because it addresses 

these same outcomes for a greater 

number of Medicare FFS patients during 

the first 60 Days of a HH stay, which 

includes the 30-day interval of the 

Rehospitalization during the First 30 

Days of HH (NQF #2380) Measure. The 

measure specifications for both 

measures are otherwise harmonized 

along several measure dimensions, 

including data source, population, 

denominator exclusions, numerator, and 

risk adjustment methodology. As a 

result, removing the Rehospitalization 

during the First 30 Days of HH (NQF 

#2380) Measure in favor of the Acute 

Care Hospitalization during the First 60 

Days of HH (NQF #0171) Measure will 

not result in a loss of the ability to 

measure the topic of acute care hospital 

utilization across the HH setting. 

For these reasons, we are proposing to 

remove the Rehospitalization during the 

First 30 Days of HH (NQF #2380) 

Measure from the HH QRP beginning 

with the CY 2021 HH QRP under our 

proposed Factor 4. A more broadly 

applicable measure (across settings, 

populations, or conditions) for 

particular topic is available. If finalized 

as proposed, data for this measure 

would be publicly reported on HH 

Compare January 2020. 

We are inviting public comment on 

this proposal. 

F. IMPACT Act Implementation Update 

In the CY 2018 HH PPS final rule (82 

FR 51731), we stated that we intended 

to specify two measures that would 

satisfy the domain of accurately 

communicating the existence and 

provision of the transfer of health 

information and care preferences under 

section 1899B(c)(1)(E) of the Act no later 

than January 1, 2019 and intend to 

propose to adopt them for the CY 2021 

HH QRP, with data collection beginning 

on or about January 1, 2020. 

As a result of the input provided 

during a public comment period 

between November 10, 2016 and 

December 11, 2016, input provided by 

a technical expert panel (TEP) convened 

by our contractor, and pilot measure 

testing conducted in 2017, we are 

engaging in continued development 

work on these two measures, including 

supplementary measure testing and 

providing the public with an 

opportunity for comment in 2018. 

Further, we reconvened a TEP for these 

measures in April 2018. We now intend 

to specify the measures under section 

1899B(c)(1)(E) of the Act no later than 

January 1, 2020, and intend to propose 

to adopt the measures beginning with 

the CY 2022 HH QRP, with data 

collection at the time point of SOC, ROC 

and Discharge beginning with January 1, 

2021. For more information on the pilot 

testing, we refer readers to: https://

www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/Post-Acute-Care-QualityInitiatives/IMPACT-Act-of-2014/ 

IMPACT-Act-Downloads-andVideos.html. 

G. Form, Manner, and Timing of OASIS 

Data Submission 

Our home health regulations, codified 

at § 484.250(a), require HHAs to submit 

OASIS assessments and Home Health 

Care Consumer Assessment of 

Healthcare Providers and Systems 

Survey® (HHCAHPS) data to meet the 

quality reporting requirements of 

section 1895(b)(3)(B)(v) of the Act. We 

are proposing to revise § 484.250(a) to 

clarify that not all OASIS data described 

in § 484.55(b) and (d) are needed for 

purposes of complying with the 

requirements of the HH QRP. OASIS 

data items may be submitted for other 

established purposes unrelated to the 

HH QRP, including payment, survey, 

the HH VBP Model, or care planning. 

Any OASIS data that are not submitted 

for the purposes of the HH QRP are not 

used for purposes of HH QRP 

compliance. 

We are inviting public comment on 

our proposal to revise our regulations at 

§ 484.250(a) to clarify that not all OASIS 

data described in § 484.55(b) and (d) are 

needed for purposes of complying with 

the requirements of the HH QRP. 

H. Proposed Policies Regarding Public 

Display for the HH QRP 

Section 1899B(g) of the Act requires 

that data and information of PAC 

provider performance on quality 

measures and resource use and other 

measures be made publicly available 

beginning not later than 2 years after the 

applicable specified ‘application date’. 

In the CY 2018 HH PPS final rule (82 

FR 51740 through 51741), we finalized 

that we would publicly display the 

Medicare Spending Per Beneficiary 

(MSPB)-PAC HH QRP beginning in CY 

2019 based on one year of claims data 

on discharges from CY 2017. 

In this proposed rule, we are 

proposing to increase the number of 

years of data used to calculate the 

MSPB–PAC HH QRP for purposes of 

display from 1 year to 2 years. Under 

this proposal, data on this measure 

would be publicly reported in CY 2019, 

or as soon thereafter as operationally 

feasible, based on discharges from CY 

2016 and CY 2017. Increasing the 

measure calculation and public display 

periods from 1 to 2 years of data 

increases the number of HHAs with 

enough data adequate for public 

reporting for the MSPB–PAC HH QRP 

measure from 90.7 percent (based on 

August 1st, 2014—July 31st, 2015 

Medicare FFS claims data) to 94.9 

percent (based on August 1st, 2014— 

July 31st, 2016 Medicare FFS claims 

data). Increasing measure public display 

periods to 2 years also aligns with the 

public display periods of these 

measures in the IRF QRP, LTCH QRP 

and SNF QRP. 

We invite public comment on our 

proposal to increase the number of years 

of data used to calculate the MSPB–PAC 

HH QRP for purposes of display from 1 

year to 2 years. 

I. Home Health Care Consumer 

Assessment of Healthcare Providers and 

Systems® (HHCAHPS) 

We are not proposing changes to the 

Home Health Care Consumer 

Assessment of Healthcare Providers and 

Systems® (HHCAHPS) Survey 

requirements for CY 2019. Therefore, 

HHCAHPS Survey requirements are as 

codified in § 484.250 and the HHCAHPS 

survey vendors’ data submission 

deadlines are as posted on HHCAHPS 

website at https://homehealthcahps.org. 

VI. Medicare Coverage of Home 

Infusion Therapy Services 

In this section of the rule, we discuss 

the new home infusion therapy benefit 

that was established in section 5012 of 

the 21st Century Cures Act. This benefit 

covers the nursing, patient training and 

education, and monitoring services 

associated with administering infusion 

drugs in a patient’s home. This 

proposed rule would establish health 

and safety standards for home infusion 

therapy and consistency in coverage for 

home infusion therapy services. Section 

1861(iii)(3)(D)(III) of the Act, as added 


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88https://www.cms.gov/Regulations-andGuidance/Guidance/Manuals/Downloads/ 

bp102c15.pdf. 89www.cms.gov/medicare-coverage-database/ 

reports/sad-exclusion-listreport.aspx?bc=AQAAAAAAAAAAAA%3D%3D. 

90https://www.cms.gov/Regulations-andGuidance/Guidance/Manuals/internet-OnlyManuals-IOMs-Items/CMS014961.html. 

by section 5012(b) of the 21st Cures Act, 

requires that a qualified home infusion 

therapy supplier be accredited by an 

accrediting organization (AO) 

designated by the Secretary in 

accordance with section 1834(u)(5) of 

the Act. Section 1834(u)(5)(A) of the Act 

identifies factors for designating AOs 

and modifying the list of designated 

AOs. Section 1834(u)(5)(B) of the Act 

requires the Secretary to designate AOs 

to accredit home infusion therapy 

suppliers furnishing home infusion 

therapy not later than January 1, 2021. 

In addition, this proposed rule 

establishes regulations for the approval 

and oversight of accrediting 

organizations that provide accreditation 

to home infusion therapy suppliers. 

This rule also provides information on 

temporary transitional payments for 

home infusion therapy services for CYs 

2019 and 2020, as mandated by section 

50401 of the BBA of 2018, proposes a 

regulatory definition of ‘‘Infusion Drug 

Administration Calendar Day’’, and 

solicits comments regarding payment 

for home infusion therapy services for 

CY 2021 and subsequent years as 

required by section 5012(d) of the 21st 

Century Cures Act. 

A. General Background 

1. Overview 

Infusion drugs and administration 

services can be provided in multiple 

health care settings, including inpatient 

hospitals, skilled nursing facilities 

(SNFs), hospital outpatient departments 

(HOPDs), physician offices, and in the 

home. Traditional Fee-for-Service (FFS) 

Medicare provides coverage for infusion 

drugs, equipment, supplies, and 

administration services. However, 

Medicare coverage requirements and 

payment vary for each of these settings. 

Infusion drugs, equipment, supplies, 

and administration are all covered by 

Medicare in the inpatient hospital, 

SNFs, HOPDs, and physician’s offices. 

Generally, Medicare payment under Part 

A for the drugs, equipment, supplies, 

and services are bundled, meaning a 

single payment is made on the basis of 

expected costs for clinically-defined 

episodes of care. For example, if a 

beneficiary is receiving an infusion drug 

during an inpatient hospital stay, the 

Part A payment for the drug, supplies, 

equipment, and drug administration is 

included in the diagnosis-related group 

(DRG) payment to the hospital under the 

Medicare inpatient prospective payment 

system. Beneficiaries are liable for the 

Medicare inpatient hospital deductible. 

Similarly, if a beneficiary is receiving an 

infusion drug while in a SNF under a 

Part A stay, the payment for the drug, 

supplies, equipment, and drug 

administration are included in the SNF 

prospective payment system payment. 

After 20 days of SNF care, there is a 

daily beneficiary cost-sharing amount 

through day 100 when the beneficiary 

becomes responsible for all costs for 

each day after day 100 of the benefit 

period. Under Medicare Part B, certain 

items and services are paid separately 

while other items and services may be 

packaged into a single payment 

together. For example, in an HOPD and 

in a physician’s office, the drug is paid 

separately, generally at the average sales 

price (ASP) plus 6 percent. There is also 

a separate payment for drug 

administration in which the payment 

for infusion supplies and equipment is 

packaged in the payment for 

administration. The separate payment 

for infusion drug administration in an 

HOPD and in a physician’s office 

generally includes a base payment 

amount for the first hour and a payment 

add-on that is a different amount for 

each additional hour of administration. 

The beneficiary is responsible for the 20 

percent coinsurance under Medicare 

Part B. Medicare FFS covers outpatient 

infusion drugs under Part B, ‘‘incident 

to’’ a physician’s services, provided the 

drugs are not usually self- administered 

by the patient. Drugs that are ‘‘not 

usually self-administered,’’ are defined 

in our manual according to how the 

Medicare population as a whole uses 

the drug, not how an individual patient 

or physician may choose to use a 

particular drug. For the purpose of this 

exclusion, the term ‘‘usually’’ means 

more than 50 percent of the time for all 

Medicare beneficiaries who use the 

drug. The term ‘‘by the patient’’ means 

Medicare beneficiaries as a collective 

whole. Therefore, if a drug is selfadministered by more than 50 percent of 

Medicare beneficiaries, the drug is 

excluded from Part B coverage. This 

determination is made on a drug-bydrug basis, not on a beneficiary-bybeneficiary basis.88 The MACs update 

Self-Administered Drug (SAD) 

exclusion lists on a quarterly basis.89

Home infusion therapy involves the 

intravenous or subcutaneous 

administration of drugs or biologicals to 

an individual at home. Certain drugs 

can be infused in the home, but the 

nature of the home setting presents 

different challenges than the settings 

previously described. The components 

needed to perform home infusion 

include the drug (for example, 

antibiotics, immune globulin), 

equipment (for example, a pump), and 

supplies (for example, tubing and 

catheters). Likewise, nursing services 

are necessary to train and educate the 

patient and caregivers on the safe 

administration of infusion drugs in the 

home. Visiting nurses often play a large 

role in home infusion. Nurses typically 

train the patient or caregiver to selfadminister the drug, educate on side 

effects and goals of therapy, and visit 

periodically to provide catheter and site 

care. Depending on patient acuity or the 

complexity of the drug administration, 

certain infusions may require more 

nursing time, especially those that 

require special handling or pre-or postinfusion protocols. The home infusion 

process typically requires coordination 

among multiple entities, including 

patients, physicians, hospital discharge 

planners, health plans, home infusion 

pharmacies, and, if applicable, home 

health agencies. With regard to payment 

for home infusion therapy under 

traditional Medicare, drugs are generally 

covered under Part B or Part D. Certain 

infusion pumps, supplies (including 

home infusion drugs), and nursing are 

covered in some circumstances through 

the Part B durable medical equipment 

(DME) benefit, the Medicare home 

health benefit, or some combination of 

these benefits. 

Medicare Part B covers a limited 

number of home infusion drugs through 

the DME benefit if: (1) The drug is 

necessary for the effective use of an 

external or implantable infusion pump 

classified as DME and determined to be 

reasonable and necessary for 

administration of the drug; and (2) the 

drug being used with the pump is itself 

reasonable and necessary for the 

treatment of an illness or injury. Only 

certain types of infusion pumps are 

covered under the DME benefit. The 

Medicare National Coverage 

Determinations Manual, chapter 1, part 

4, § 280.1 describes the types of infusion 

pumps that are covered under the DME 

benefit.90 For DME infusion pumps, 

Medicare Part B covers the infusion 

drugs and other supplies and services 

necessary for the effective use of the 

pump, but does not explicitly require or 

pay separately for any associated home 

infusion nursing services beyond what 

is necessary for teaching the patient 

and/or caregiver on how to operate the 

equipment in order to administer the 


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91See 42 CFR 424.57(c)(12), which states that the 

DME ‘‘supplier must document that it or another 

qualified party has at an appropriate time, provided 

beneficiaries with necessary information and 

instructions on how to use Medicare-covered items 

safely and effectively.’’ 

infusion safely and effectively.91

Through local coverage policies, the 

DME Medicare administrative 

contractors (MACs) specify the details of 

which infusion drugs are covered with 

these pumps. Examples of covered Part 

B DME infusion drugs include, among 

others, certain IV drugs for heart failure 

and pulmonary arterial hypertension, 

immune globulin for primary immune 

deficiency (PID), insulin, antifungals, 

antivirals, and chemotherapy, in limited 

circumstances. 

2. Home Infusion Therapy Legislation 

Section 5012 of the 21st Century 

Cures Act (Pub. L. 114–255) (Cures Act) 

creates a separate Medicare Part B 

benefit category under 1861(s)(2)(GG) of 

the Act for coverage of home infusion 

therapy-associated professional services 

for certain drugs and biologicals 

administered intravenously, or 

subcutaneously through a pump that is 

an item of DME, effective January 1, 

2021. The infusion pump and supplies 

(including home infusion drugs) will 

continue to be covered under the DME 

benefit. Section 1861(iii)(2) of the Act 

defines home infusion therapy to 

include the following items and 

services: the professional services 

(including nursing services), furnished 

in accordance with the plan, training 

and education (not otherwise included 

in the payment for the DME), remote 

monitoring, and other monitoring 

services for the provision of home 

infusion therapy furnished by a 

qualified home infusion therapy 

supplier in the patient’s home. Section 

1861(iii)(3)(B) of the Act defines the 

patient’s home to mean a place of 

residence used as the home of an 

individual as defined for purposes of 

section 1861(n) of the Act. As outlined 

in section 1861(iii)(1) of the Act, i to be 

eligible to receive home infusion 

therapy services under the home 

infusion therapy benefit, the patient 

must be under the care of an applicable 

provider, defined in section 

1861(iii)(3)(A) of the Act as a physician, 

nurse practitioner, or physician’s 

assistant, and the patient must be under 

a physician-established plan of care that 

prescribes the type, amount, and 

duration of infusion therapy services 

that are to be furnished. The plan of care 

must be periodically reviewed by the 

physician in coordination with the 

furnishing of home infusion drugs (as 

defined in section 1861(iii)(3)(C) of the 

Act). Section 1861(iii)(3)(C) of the Act 

defines a ‘‘home infusion drug’’ under 

the home infusion therapy benefit as a 

drug or biological administered 

intravenously, or subcutaneously for an 

administration period of 15 minutes or 

more, in the patient’s home, through a 

pump that is an item of DME as defined 

under section 1861(n) of the Act. This 

definition does not include insulin 

pump systems or any self-administered 

drug or biological on a self-administered 

drug exclusion list. 

Section 1861(iii)(3)(D)(i) of the Act 

defines a qualified home infusion 

therapy supplier as a pharmacy, 

physician, or other provider of services 

or supplier licensed by the state in 

which supplies or services are provided. 

The provision specifies qualified home 

infusion therapy suppliers must furnish 

infusion therapy to individuals with 

acute or chronic conditions requiring 

administration of home infusion drugs; 

ensure the safe and effective provision 

and administration of home infusion 

therapy on a 7-day-a-week, 24-hour-aday basis; be accredited by an 

organization designated by the 

Secretary; and meet other such 

requirements as the Secretary deems 

appropriate, taking into account the 

standards of care for home infusion 

therapy established by Medicare 

Advantage plans under part C and in the 

private sector. The supplier may 

subcontract with a pharmacy, physician, 

other qualified supplier or provider of 

medical services, in order to meet these 

requirements. 

Section 1834(u) of the Act requires 

the Secretary to implement a payment 

system under which a single payment is 

made to a home infusion therapy 

supplier for the items and services 

(professional services, including nursing 

services; training and education; remote 

monitoring, and other monitoring 

services), beginning January 1, 2021. 

The single payment must take into 

account, as appropriate, types of 

infusion therapy, including variations in 

utilization of services by therapy type. 

In addition, the single payment amount 

is required to be adjusted to reflect 

geographic wage index and other costs 

that may vary by region, patient acuity, 

and complexity of drug administration. 

The single payment may be adjusted to 

reflect outlier situations, and other 

factors as deemed appropriate by the 

Secretary, which are required to be done 

in a budget neutral manner. Section 

1834(u)(3) of the Act specifies that 

annual updates to the single payment 

are required to be made beginning 

January 1, 2022, by increasing the single 

payment amount by the percent increase 

in the Consumer Price Index (CPI) for all 

urban consumers for the 12-month 

period ending with June of the 

preceding year, reduced by the multifactor productivity adjustment. The unit 

of single payment for each infusion drug 

administration calendar day, including 

the required adjustments and the annual 

update, cannot exceed the amount 

determined under the fee schedule 

under section 1848 of the Act for 

infusion therapy services if furnished in 

a physician’s office, and the single 

payment amount cannot reflect more 

than 5 hours of infusion for a particular 

therapy per calendar day. Section 

1834(u)(4) of the Act also allows the 

Secretary discretion, as appropriate, to 

consider prior authorization 

requirements for home infusion therapy 

services. Finally, section 5012(c)(3) of 

the Cures Act amended section 1861(m) 

of the Act to exclude home infusion 

therapy from the HH PPS beginning on 

January 1, 2021. 

B. Proposed Health and Safety 

Standards for Home Infusion Therapy 

1. Introduction 

Section 5012 of the Cures Act requires 

that, to receive payment under the 

Medicare home infusion therapy 

benefit, home infusion therapy 

suppliers must select a CMS-approved 

accreditation organization (AO) and 

undergo an accreditation review process 

to demonstrate that the home infusion 

therapy supplier meets the AO’s 

standards. Section 1861(iii) of the Act, 

as added by section 5012 of the Cures 

Act, sets forth four elements for home 

infusion therapy in the following areas: 

(1) Requiring that the patient be under 

the care of a physician, nurse 

practitioner, or physician assistant; (2) 

requiring that all patients have a plan of 

care established and updated by a 

physician that sets out the care and 

prescribed infusion therapy necessary to 

meet the patient specific needs; (3) 

providing patients with education and 

training on the effective use of 

medications and equipment in the home 

(not otherwise paid for as durable 

medical equipment); and (4) providing 

monitoring and remote monitoring 

services associated with administering 

infusion drugs in a patient’s home. 

The Journal of Infusion Nursing 

standards of practice specifically 

address patient education, and state that 

it is the clinician’s role to educate the 

patient, caregiver, and/or surrogate 

about the prescribed infusion therapy 

and plan of care including, but not 

limited to, purpose and expected 

outcome(s) and/or goals of treatment, 

infusion therapy administration; 

infusion device-related care; potential 


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92 Infusion Therapy: Standards of Practice, 

Journal of Infusion Nursing, Wolters Kluwer: Jan/ 

Feb 2016 pp S25–S26 

93 Government Accountability Office. (2010). 

Home Infusion Therapy. Differences between 

Medicare and Private Insurers’ coverage. (GAO 

Publication No. 10–426). Washington, DC: U.S. 

Government Printing Office. 

94National Home Infusion therapy Association. 

Medicare and Home Infusion White Paper. 

Retrieved from https://www.nhia.org/resource/

legislative/documents/NHIAWhitePaper-Web.pdf. 

95American Society of Health-System 

Pharmacists. ASHP guidelines on Home Infusion 

Pharmacy Service, 2014. Retrieved from: https://

www.ashp.org/-/media/assets/policy-guidelines/ 

docs/guidelines/home-infusion-pharmacy-services.

ashx?la=en&hash=255092A51D0AE4746

C151C51AC7BF82217AC2F76. 

complications; or adverse effects 

associated with treatment. (Infusion 

Therapy Standards of Practice, 2015).92

Currently, standards for home 

infusion therapy have been established 

by the current AOs; however, they are 

not necessarily consistent. In order to 

assure consistency in the areas 

identified in the Act, we are establishing 

basic standards that all AOs would be 

required to meet or exceed. We are 

proposing universal standards for 

Medicare-participating qualified home 

infusion therapy suppliers to ensure the 

quality and safety of home infusion 

therapy services for all beneficiaries that 

these suppliers serve. 

In preparation for developing these 

standards and to gain a clear 

understanding of the current home 

infusion therapy supplier private sector 

climate, we reviewed the requirements 

established by section 5012 of the Cures 

Act, performed an extensive review of 

the standards from all six AOs that 

accredit home infusion suppliers (The 

Joint Commission, Accreditation 

Commission for Health Care, 

Compliance Team, Community Health 

Accreditation Partner, Healthcare 

Quality Association on Accreditation, 

and National Association of Boards of 

Pharmacy), and reviewed various other 

government and industry publications 

listed in this proposed rule. In addition 

to the standards, we reviewed the 

following documents related to 

coverage: 

• Government Accountability 

Office—10–426 report, which describes 

the state of coverage of home infusion 

therapy components under Medicare 

fee-for-service prior to the enactment of 

the Cures Act (GAO, 2010).93

• Medicare and Home Infusion white 

paper written by the National Home 

Infusion Association (NHIA), which 

provided an overview of Medicare 

coverage provided for Home Infusion 

Therapy services prior to the enactment 

of the Cures Act, as well as results of a 

study conducted by Avalere Health on 

the potential savings that could result 

from Medicare coverage of infusion 

therapy provided in the home (National 

Home Infusion Therapy Association, 

NDS).94

• American Society of Health System 

Pharmacists Guidelines on Home 

Infusion Pharmacy Services, which 

provided an in-depth overview of 

specialized, complex. pharmaceuticals, 

best practices on providing home 

infusion therapy in the home or 

alternative site settings, and the plans to 

execute and manage the therapy 

(American Society of Health-System 

Pharmacists. ASHP guidelines on Home 

Infusion Pharmacy Service, 2014).95

• The requirements of numerous 

Medicare Advantage plans, Medicare 

FFS, and private insurance plans. 

Upon review of these materials, we 

believe that there is a sufficient privatesector framework already in place to 

address many of the areas that would 

typically be included in the 

establishment of basic health and safety 

standards for home infusion therapy. 

For example, existing AO standards 

include requirements related to plan of 

care, monitoring, patient assessment, 

quality improvement, and infection 

control. While the exact content of the 

AO standards vary, we believe that the 

standards are adequate to ensure patient 

health and safety. The AO representing 

the largest number of home infusion 

therapy suppliers requires that home 

infusion pharmacies provide certain 

services to ensure safe and appropriate 

therapy, in compliance with nationally 

recognized standards of practice. Patient 

training and education activities, as part 

of their required admission procedures, 

include the use of medical and 

disposable equipment, medication 

storage, emergency procedures, vascular 

access device management, recognition 

of a drug reaction, and when to report 

any adverse drug event. As such, we 

conclude that it is appropriate at this 

time to propose requirements for only 

those elements specifically identified in 

section 1861(iii) of the Act. Through the 

CMS accreditation organization process, 

we would monitor home infusion 

therapy suppliers to assure that services 

are provided in a safe and effective 

manner, and would consider future 

rulemaking to address any areas that 

may need improvement in the future. 

We are seeking public comment on this 

approach and invite comments related 

to the home infusion therapy proposed 

standards. Specifically, are the 

standards sufficient for Medicare 

beneficiaries, should CMS consider 

additional standards and would 

additional standards impose additional 

burden? 

2. Home Infusion Therapy Supplier 

Requirements (Proposed Part 486, 

Subpart I) 

We propose to add a new 42 CFR part 

486, subpart I, to incorporate the home 

infusion therapy supplier requirements. 

The proposed regulations would 

provide a framework for CMS to 

approve home infusion therapy 

accreditation organizations and give 

them the authority to approve Medicare 

certification for home infusion therapy 

suppliers. Proposed subpart I would 

include General Provisions (Basis and 

Scope, and Definitions) and Standards 

for Home Infusion Therapy (Plan of Care 

and Required Services). 

a. Basis and Scope (Proposed § 486.500) 

We propose to set forth the basis and 

scope of part 486 at § 486.500. Part 486 

is based on sections 1861(iii)(2)(D) of 

the Act, which establishes the 

requirements that a home infusion 

therapy supplier must meet in order to 

participate in the Medicare program. 

These provisions serve as the basis for 

survey activities for the purposes of 

determining whether a home infusion 

therapy supplier meets the requirements 

for participation in Medicare. Section 

1834(u) of the Act serves as the basis for 

the establishment of a prospective 

payment system for home infusion 

therapy covered under Medicare. In 

addition, 1834(u)(5) of the Act 

establishes the factors for the Secretary 

to designate organizations to accredit 

suppliers furnishing home infusion 

therapy and requires that organizations 

be designated not later than January 1, 

2021. 

b. Definitions (Proposed § 486.505) 

At § 486.505, we propose to define 

certain terms that would be used in the 

home infusion therapy requirements. 

We propose to define the terms 

‘‘applicable provider’’, ‘‘home’’, ‘‘home 

infusion drug’’, and ‘‘qualified home 

infusion therapy supplier’’ in 

accordance with the definitions set forth 

in section 1861(iii) of the Act. 

Furthermore, section 1861(iii) of the Act 

includes a definition of the term ‘‘home 

infusion therapy’’ that is the basis of the 

proposed health and safety 

requirements set forth in this rule. In 

accordance with the Act, we propose 

the following definitions: 

• ‘‘Applicable provider’’ would mean 

a physician, a nurse practitioner, and a 

physician assistant. 

• ‘‘Home’’ would mean a place of 

residence used as the home of an 

individual, including an institution that 


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96 Infusion Therapy: Standards of Practice, 

Journal of Infusion Nursing, Wolters Kluwer: Jan/ 

Feb 2016 pp S25–S26. 

is used as a home. However, an 

institution that is used as a home may 

not be a hospital, CAH, or SNF as 

defined in sections 1861(e), 

1861(mm)(1), and 1819 of the Act, 

respectively. 

• ‘‘Home infusion drug’’ would mean 

a parenteral drug or biological 

administered intravenously, or 

subcutaneously for an administration 

period of 15 minutes or more, in the 

home of an individual through a pump 

that is an item of durable medical 

equipment. The term does not include 

insulin pump systems or a selfadministered drug or biological on a 

self-administered drug exclusion list. 

• ‘‘Qualified home infusion therapy 

supplier’’ would mean a supplier of 

home infusion therapy that meets the all 

of the following criteria which are set 

forth at section 1861(iii)(3)(D)(i) of the 

Act: (1) Furnishes infusion therapy to 

individuals with acute or chronic 

conditions requiring administration of 

home infusion drugs; (2) ensures the 

safe and effective provision and 

administration of home infusion therapy 

on a 7-day-a-week, 24-hour-a-day basis; 

(3) is accredited by an organization 

designated by the Secretary in 

accordance with section 1834(u)(5) of 

the Act; and (4) meets such other 

requirements as the Secretary 

determines appropriate. 

c. Standards for Home Infusion Therapy 

Proposed subpart I, as required by 

section 5012 of the Cures Act, would 

specify that the qualified home infusion 

therapy supplier ensure that all patients 

have a plan of care established by a 

physician. 

(1) Plan of Care (Proposed § 486.520) 

At § 486.520(a), we propose to require 

that all patients must be under the care 

of an ‘‘applicable provider’’ as defined 

at § 486.505. At § 486.520(b) we would 

require that the qualified home infusion 

therapy supplier ensure that all patients 

must have a plan of care established by 

a physician that prescribes the type, 

amount, and duration of home infusion 

therapy services that are furnished. The 

plan of care would also include the 

specific medication, the prescribed 

dosage and frequency as well as the 

professional services to be utilized for 

treatment. In addition, the plan of care 

would specify the care and services 

necessary to meet the patient-specific 

needs. 

We also propose, at § 486.520(c), that 

the qualified home infusion therapy 

supplier must ensure that the plan of 

care for each patient is periodically 

reviewed by the physician. We do not 

propose to establish a specific time 

frame for review requirements, but the 

expectation is that the physician is 

active in the patient’s care and can make 

appropriate decisions related to the 

course of therapy if changes are 

necessary in regards to the progress of 

the patient and goal achievement with 

the infusion therapy. We welcome 

comments regarding the proposed home 

infusion therapy plan of care 

requirements and if we should include 

specific review timeframes for the plan 

of care. 

(2) Required Services (Proposed 

§ 486.525) 

Section 1861(iii)(2)(D)(II) of the Act 

specifically mandates that qualified 

home infusion therapy suppliers ensure 

the safe and effective provision and 

administration of home infusion therapy 

on a 7-day-a-week, 24-hour-a-day basis. 

Infusion drugs are administered directly 

into a vein or under the skin, eliciting 

a more rapid clinical response than with 

oral medications. Consequently, an 

adverse effect or a medication error 

could result in a quicker and/or more 

severe complication. Therefore, at 

§ 486.525(a), we propose to require the 

provision of professional services, 

including nursing services, furnished in 

accordance with the plan of care. We 

propose to require that home infusion 

therapy suppliers ensure that 

professional services are available on a 

7-day-a-week, 24-hour-a-day basis in 

order to ensure that patients have access 

to expert clinical knowledge and advice 

in the event of an urgent or emergent 

infusion-related situation. This 

proposed requirement is imperative, as 

the success of home infusion therapy is 

often dependent upon the professional 

services being available during all hours 

and days of the week that allows for the 

patient to safely and effectively manage 

all aspects of treatment. 

At § 486.525(b), we propose to require 

patient training and education, not 

otherwise paid for as durable medical 

equipment, and as described in 42 CFR 

424.57(c)(12). This proposed 

requirement is consistent with section 

1861(iii)(2)(B). In addition, the proposed 

patient training and education 

requirements are consistent with 

standards that are already in place, as 

established by the current AOs of home 

infusion therapy suppliers. This is a 

best practice, as home infusion therapy 

may entail the use of equipment and 

supplies with which patients’ may not 

be comfortable or familiar. 

At § 486.525(c), we propose to require 

qualified home infusion therapy 

suppliers to provide remote monitoring 

and monitoring services for the 

provision of home infusion therapy 

services and home infusion drugs 

furnished by a qualified home infusion 

therapy supplier. This proposed 

requirement is also consistent with 

section 1861(iii)(2)(B). Monitoring the 

patient receiving infusion therapy in 

their home is a vital standard of practice 

that is an integral part of providing 

medical care to patients in their home.96

The expectation is that home infusion 

therapy suppliers would provide 

ongoing patient monitoring and 

continual reassessment of the patient to 

evaluate response to treatment, drug 

complications, adverse reactions, and 

patient compliance. Remote monitoring 

may be completed through follow-up 

telephone or other electronic 

communication, based on patient 

preference of communication. However, 

we do not propose to limit remote 

monitoring to these methods. Suppliers 

would be permitted to use all available 

remote monitoring methods that are safe 

and appropriate for their patients and 

clinicians and as specified in the plan 

of care as long as adequate security and 

privacy protections are utilized. 

Monitoring may also be performed 

directly during in-home patient visits. 

Additional discussion on remote 

monitoring and monitoring services can 

be found in section II.C.2.d. of this 

proposed rule. We invite the public to 

submit comments regarding the 

proposed home infusion therapy 

supplier service requirements. 

C. Approval and Oversight of 

Accrediting Organizations for Home 

Infusion Therapy Suppliers 

1. Background 

Section 1861(iii)(3)(D)(III) of the 

Social Security Act (the Act), as added 

by section 5012(b) of the Cures Act, 

requires that a home infusion therapy 

supplier be accredited by an AO 

designated by the Secretary in 

accordance with section 1834 (u)(5) of 

the Act. Section 1834(u)(5)(A) of the Act 

identifies factors for designating AOs 

and modifying the list of designated 

AOs. These statutory factors are: (1) The 

ability of the organization to conduct 

timely reviews of accreditation 

applications; (2) the ability of the 

organization take into account the 

capacities of suppliers located in a rural 

area (as defined in section 1886(d)(2)(D) 

of the Act); (3) whether the organization 

has established reasonable fees to be 

charged to suppliers applying for 

accreditation; and, (4) such other factors 

as the Secretary determines appropriate. 


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Section 1834(u)(5)(B) of the Act 

requires the Secretary to designate AOs 

to accredit home infusion therapy 

suppliers furnishing home infusion 

therapy not later than January 1, 2021. 

However, at this time, there are six AOs 

that are providing accreditation to home 

infusion therapy suppliers. These AOs 

are: (1) The Joint Commission (TJC); (2) 

Accreditation Commission for Health 

Care (ACHC); (3) Compliance Team 

(TCT); (4) Community Health 

Accreditation Partner (CHAP); (5) 

Healthcare Quality Association on 

Accreditation; and (6) National 

Association of Boards of Pharmacy. 

These AOs are accrediting home 

infusion therapy suppliers as part of the 

deeming accreditation of home health 

agencies. However, these AOs have not 

been separately approved by Medicare 

for accreditation of home infusion 

therapy services. 

We are proposing to publish a 

solicitation notice in the Federal 

Register, in which we would invite 

national AOs to apply to accredit home 

infusion therapy suppliers for the 

Medicare program. We are proposing 

that this solicitation notice would be 

published after the final rule is 

published, so that we can designate AOs 

to accredit home infusion therapy 

suppliers by no later than January 1, 

2021 as required by 1834(u)(5)(B) of the 

Act. Any AOs that respond to this 

solicitation notice would be required to 

submit an application for CMS-approval 

of their home infusion therapy 

accreditation program. The application 

submitted by an AO that respond to the 

solicitation notice would be required to 

meet all requirements set forth in 

proposed § 488.1010 and demonstrate 

that their substantive requirements are 

equal to or more stringent than our 

proposed regulations at part 485, 

subpart I. 

Section 1861(iii)(3)(D) of the Act 

requires ‘‘qualified home infusion 

therapy suppliers’’ to be accredited by a 

CMS-approved AO. We are also 

proposing that, in order for the home 

infusion therapy suppliers accredited by 

the six AOs that currently provide nonMedicare approved home infusion 

therapy accreditation to continue 

receiving payment for the home 

infusion therapy services they provide, 

the 6 existing AOs must submit 

applications to CMS for Medicare 

approval of their home infusion therapy 

accreditation program. The 

accreditation currently being provided 

by these six AOs to the home infusion 

therapy suppliers is part of another 

accreditation program that has not be 

separately approved by CMS. These 

AOs have not submitted an application 

to CMS for approval of a specific home 

infusion therapy accreditation program 

that meets the requirements of section 

1861(iii) and section 1834(u)(5) of the 

Act; therefore, CMS has not been able to 

determine whether the home infusion 

therapy accreditation program standards 

used by these AOs meets or exceeds 

those of Medicare. 

We are proposing that the home 

infusion therapy accreditation program 

submitted to CMS by these existing AOs 

be a separate and distinct accreditation 

program from the AO’s home health 

accreditation program. This would 

mean that these AOs must have a 

separate accreditation program with 

separate survey processes and standards 

for the accreditation of home infusion 

therapy suppliers. In addition, we 

would require that the application 

submitted by the six AOs that currently 

provide non-Medicare approved 

accreditation to home infusion therapy 

suppliers meet the requirements set 

forth in the proposed regulations at 

§ 488.1010 and enforce the substantive 

health and safety standards proposed to 

be set out at 42 CFR part 485, subpart 

I. 

Section 1834(u)(5)(C)(ii) of the Act 

states that in the case where the 

Secretary removes a home infusion 

therapy AO from the list of designated 

home infusion therapy AOs, any home 

infusion therapy supplier that is 

accredited by the home infusion therapy 

AO during the period beginning on the 

date on which the home infusion 

therapy AO is designated as an CMSapproved home infusion therapy AO 

and ending on the date on which the 

home infusion therapy AO is removed 

from such list, shall be considered to 

have been accredited by an home 

infusion therapy AO designated by the 

Secretary for the remaining period such 

accreditation is in effect. Under section 

1834(u)(5)(D) of the Act, in the case of 

a home infusion therapy supplier that is 

accredited before January 1, 2021 by a 

home infusion therapy AO designated 

by the Secretary as of January 1, 2019, 

such home infusion therapy supplier 

shall be considered to be accredited by 

a home infusion therapy AO designated 

by the Secretary as of January 1, 2023, 

for the remaining period such 

accreditation is in effect. Home infusion 

therapy suppliers are required to receive 

accreditation before receiving Medicare 

payment for services provided to 

Medicare beneficiaries. 

Section 1861(iii)(3)(D) of the Act 

defines ‘‘qualified home infusion 

therapy suppliers’’ as being accredited 

by a CMS-approved AO. CMS is 

proposing to establish regulations for 

the approval and oversight of AOs that 

accredit home infusion therapy 

suppliers that address the following: (1) 

The required components to be 

included in a home infusion therapy 

AO’s initial or renewal application for 

CMS approval of the AO’s home 

infusion therapy accreditation program; 

(2) the procedure for CMS’ review and 

approval of the home infusion therapy 

AOs application for CMS approval of its 

home infusion therapy accreditation 

program; and (3) the ongoing monitoring 

and oversight of CMS-approved home 

infusion therapy AOs. 

2. Proposed Process and Standards for 

Home Infusion Therapy Accreditation 

and the Approval and Oversight of 

Accrediting Organizations With CMSApproved Accreditation Programs for 

Home Infusion Therapy Services 

a. Establishment of Regulatory 

Requirements 

We propose to establish new 

regulations in a new subpart L in 42 

CFR part 488 that would govern CMS’ 

approval and oversight of AOs that 

accredit home infusion therapy 

suppliers. We believe these proposed 

new regulations would provide CMS 

with reasonable assurance that the home 

infusion therapy AO’s accreditation 

program requirements are consistent 

with the appropriate Medicare 

accreditation program requirements. 

Further, we believe that these proposed 

regulations would provide CMS with a 

way to provide oversight for AOs that 

accredit home infusion therapy 

suppliers, and provide CMS with 

authority over the home infusion 

therapy suppliers. 

We are proposing to implement a 

comprehensive, consistent and 

standardized set of AO oversight 

regulations for accreditors of home 

infusion therapy suppliers. It is our 

intention to provide home infusion 

therapy AOs with the flexibility to 

innovate within the framework of these 

proposed regulations while assuring 

that their accreditation standards meet, 

or exceed the appropriate Medicare 

requirements, and their survey 

processes are comparable to those of 

Medicare. ‘‘Flexibility to innovate’’ 

means that AOs retain the freedom to 

develop their own accreditation 

standards and survey processes, so long 

as the AO ensures that they meet the 

proposed health and safety standards 

(contained in 42 CFR part 486, subpart 

B) and the AO meets the requirements 

of the proposed AO approval and 

oversight regulations. 

The proposed regulations would 

reflect requirements similar to those in 

place for the oversight of national AOs 


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for Medicare-certified providers and 

suppliers which are codified at 42 CFR 

488.1 through 488.9 and 42 CFR part 

489, but would be modified, as 

appropriate, to be applicable for 

accreditors of home infusion therapy 

suppliers. We believe that it is 

important to have AO approval and 

oversight regulations that are as 

consistent as possible across all AOs 

and to treat all AOs in a similar manner. 

b. Consideration of Existing Regulations 

In formulating our approach to 

implementing the statutory 

requirements related to accreditation 

organizations, we had considered using 

the regulations at 42 CFR 488.1 to 

488.13 for the approval and oversight of 

AOs that accredit home infusion 

therapy suppliers. However, we decided 

not to do so because Congress, by setting 

out separate accreditation organization 

approval standards for home infusion 

therapy suppliers at 1834(u)(5)(A) of the 

Act, intended approval for this 

accreditation program to be a discrete 

process. We believe that having a 

separate set of approval regulations 

applicable only to home infusion 

therapy suppliers will best reflect 

Congress’s intent. 

Only limited portions of the 

regulations at §§ 488.1 through 488.13 

would apply to AOs that accredit home 

infusion therapy suppliers. For 

example, § 488.6, which provides that a 

supplier or provider that has been 

granted ‘‘deemed status’’ by CMS by 

virtue of its accreditation from a CMSapproved accreditation program is 

eligible to participate in the Medicaid 

program if they are not required under 

Medicaid regulations to comply with 

any requirements other than Medicare 

participation requirements would not 

apply to home infusion therapy 

suppliers because home infusion 

therapy suppliers cannot be deemed. 

The deeming process only applies to 

certain types of Medicare certified 

providers and suppliers, such as 

hospitals. 

Section 488.7 titled ‘‘Release and use 

of accreditation surveys’’ and § 488.8 

titled ‘‘Ongoing review of accrediting 

organizations’’ would apply to AOs that 

accredit home infusion therapy 

suppliers. However, § 488.9 titled 

‘‘Validation surveys’’ would not apply 

to home infusion therapy suppliers 

because the State Survey Agency (SA) 

only performs validation surveys for 

Medicare providers that have an 

agreement with Medicare. Home 

infusion therapy suppliers are enrolled 

in the Medicare program but do not 

enter into an agreement with Medicare, 

therefore the SA will not perform 

validation surveys of home infusion 

therapy suppliers. Also, section 1864(a) 

of the Act provides, that by agreement 

with the Secretary, the SA shall provide 

services to the following Medicare 

certified healthcare providers: 

Hospitals, skilled nursing facilities, 

home health agencies, hospice 

programs, rural health clinics, critical 

access hospitals, comprehensive 

outpatient rehabilitation facilities, 

laboratories, clinics, rehabilitation 

agencies, public health agencies, or 

ambulatory surgical centers. 

Section 488.10, titled ‘‘State survey 

agency review: Statutory provisions’’, 

§ 488.11 titled ‘‘State survey agency 

functions’’ and § 488.12 titled ‘‘Effect of 

survey agency certification’’ would also 

not apply to home infusion therapy 

AOs. This is because, as stated 

previously, the SA does not perform 

validation surveys for AOs that accredit 

home infusion therapy providers. 

Section 488.13, titled ‘‘Loss of 

accreditation’’ provides that ‘‘if an 

accrediting organization notifies CMS 

that it is terminating a provider or 

supplier due to non-compliance with its 

CMS-approved accreditation 

requirements, the SA will conduct a full 

review in a timely manner.’’ This 

section would also not apply to AOs 

that accredit home infusion therapy 

suppliers because this regulation section 

requires use of the SA. 

Section 488.14 titled, ‘‘Effect of QIO 

review’’ provides that ‘‘when a QIO is 

conducting review activities under 

section 1154 of the Act and part 466 of 

this chapter, its activities are in lieu of 

the utilization review and evaluation 

activities required of health care 

institutions under sections 1861(e)(6), 

and 1861(k) of the Act.’’ This section 

would not apply to home infusion 

therapy suppliers because it is only 

applicable only to hospitals. 

Finally, § 488.18, titled 

‘‘Documentation of findings’’ states that 

‘‘the findings of the State agency with 

respect to each of the conditions of 

participation, requirements (for SNFs 

and NFs), or conditions for coverage 

must be adequately documented.’’ This 

section would not apply to AOs that 

accredit home infusion therapy 

suppliers because it involves the finding 

of the SA related only to SNFs and NFs. 

In conclusion, a majority of sections 

contained in §§ 488.1 through 488.13 do 

not apply to home infusion therapy AOs 

and home infusion therapy suppliers. 

Therefore, we are proposing to create a 

separate set of regulations that are 

specifically applicable to home infusion 

therapy AOs and suppliers. 

We seek comment on our decision not 

to use the existing regulation at §§ 488.1 

through 488.13. 

c. Consideration of a Validation Process 

for Accrediting Organizations That 

Accredit Home Infusion Therapy 

Suppliers 

Our conventional validation process 

involves the participation of the CMS 

Regional Offices (ROs) to request the 

State Survey Agency to conduct an 

onsite validation (follow-up) survey 

within 60 days of an AO’s onsite survey. 

The purpose of a validation survey is to 

evaluate the ability of that AO’s survey 

process to identify serious, condition 

level deficiencies. 

We are not proposing to establish a 

validation program requirement for 

home infusion therapy AOs and 

suppliers due to a number of resource 

constraints. Several factors limit our 

ability to establish and implement a 

validation program for home infusion 

therapy AOs. First, the SAs are not 

available to perform validation surveys 

for home infusion therapy AOs 

suppliers and other similar non-certified 

providers and suppliers. Section 1864(a) 

of the Act provides the SA, by 

agreement with the Secretary, provides 

services to the following Medicare 

certified healthcare providers: 

Hospitals, skilled nursing facilities, 

home health agencies, hospice 

programs, rural health clinics, critical 

access hospitals, comprehensive 

outpatient rehabilitation facilities, 

laboratories, clinics, rehabilitation 

agencies, public health agencies, or 

ambulatory surgical centers. 

Second, a validation program for 

home infusion therapy supplier AOs 

would require the use of contractors. 

Third, achieving sample sizes that are 

statistically significant from which to 

draw reliable conclusions about AO 

performances across all home infusion 

therapy suppliers would be problematic 

as there are a limited number of home 

infusion therapy suppliers. Due to the 

factors stated previously, we are not 

proposing to include validation 

requirements in the proposed new 

regulations for the oversight of AOs that 

accredit suppliers at this time. We seek 

public comment on the decision not to 

propose a validation process at this 

time. 

Even though we would not have a 

formal validation process in place, we 

would be able to monitor the 

performance of the home infusion 

therapy AOs as part of the ongoing AO 

oversight process provided for in the 

proposed home infusion therapy AO 

approval and oversight regulations at 

§§ 488.1010 through 488.1050. For 


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example, under proposed § 488.1030 we 

would have the ability to perform 

performance reviews to evaluate the 

performance of each CMS-approved 

home infusion therapy accreditation 

program on an ongoing basis; 

comparability reviews to assess the 

equivalency of a home infusion therapy 

AO’s CMS-approved program 

requirements with the comparable 

Medicare home infusion therapy 

accreditation requirements after CMS 

imposes new or revised Medicare 

accreditation requirements; and 

standards reviews when a home 

infusion therapy accrediting 

organization proposes to adopt new or 

revised accreditation standards. We may 

also perform CMS-approved home 

infusion therapy accreditation program 

review if a comparability or 

performance, or standards review 

reveals evidence of substantial noncompliance of a home infusion therapy 

AO’s CMS-approved home infusion 

therapy accreditation program with the 

requirements of this subpart. (See 

proposed § 488.1005 below for a 

definition of substantial noncompliance). 

In addition, proposed § 488.1035 

would require the home infusion 

therapy AOs to submit information to 

CMS which will help us monitor the 

AO’s performance. This information 

would also help to ensure that the home 

infusion therapy suppliers accredited by 

the AO provide care that meets the 

proposed health and safety standards 

contained in 42 CFR part 486, subpart 

B. This information includes the 

following: 

• Copies of all home infusion therapy 

supplier accreditation surveys, together 

with any survey-related information. 

• Notice of all accreditation 

decisions. 

• Notice of all complaints related to 

the AO’s accredited suppliers. 

• Information about all home infusion 

therapy accredited suppliers against 

which the home infusion therapy 

accreditation organization has taken 

remedial or adverse action, including 

revocation, withdrawal, or revision of 

the providers or suppliers accreditation. 

• Annual basis, summary data 

specified by CMS that relate to the past 

year’s accreditation activities and 

trends. 

• Notice of any proposed changes in 

the home infusion therapy accrediting 

organization’s accreditation standards or 

requirements or survey process. 

d. Application Requirement for AOs 

That Currently Provide Accreditation 

for Home Infusion Therapy Suppliers 

In this rule, we are proposing to 

establish regulations for the approval 

and oversight of AOs for home infusion 

therapy suppliers. We are also 

proposing the health and safety 

standards which home infusion therapy 

suppliers must meet, and which the 

home infusion AOs must meet or exceed 

in their accreditation standards. These 

health and safety standards are set forth 

at 42 CFR part 486, subpart I. The AOs 

that currently accredit home infusion 

therapy suppliers have not heretofore 

been governed by any CMS regulations 

related to home infusion therapy 

accreditation or health and safety 

standards. These AOs have each created 

their own set of accreditations 

standards. These accreditation 

standards vary from AO to AO. 

Section 1834(u)(5)(C) of the Act 

requires home infusion therapy 

suppliers to be accredited in order to 

receive payment for the services they 

provide. We propose to require that the 

home infusion therapy accreditation 

program submitted to CMS for approval 

by each of the AOs that currently 

accredit home infusion therapy 

suppliers be separate and distinct 

accreditation programs that are not part 

of the AOs home health accreditation 

program. We would further require that 

the AOs home infusion therapy 

accreditation standards meet or exceed 

the proposed health and safety 

standards for home infusion therapy 

suppliers. Finally, we would require 

that the application meet the 

requirements of proposed 42 CFR 

488.1010. 

We solicit comments on these 

proposals. 

e. Oversight of Home Infusion Therapy 

Accrediting Organizations 

As noted previously, we are 

proposing to create a new set of 

regulations titled, ‘‘Approval and 

Oversight of Home Infusion Therapy 

Supplier Accrediting Organizations’’ at 

42 CFR part 488, subpart L. These 

proposed regulations would set forth the 

application and reapplication 

procedures for national AOs seeking 

approval or re-approval of authority to 

accredit home infusion therapy 

suppliers; ongoing CMS oversight 

processes for approved AOs that 

accredit home infusion therapy 

suppliers; and, appeal procedures for 

AOs that accredit home infusion 

therapy suppliers. In this section of the 

proposed rule, we describe our 

proposed regulatory provisions. 

The following sections discuss the 

proposed regulations, in their proposed 

order. 

(1) Basis and Scope (§ 488.1000) 

We propose at § 488.1000 to set forth 

the statutory authority related to this set 

of proposed regulations. Sections 

1834(u)(5) and 1861(iii) of the Act 

would be the statutory basis for these 

proposed regulations. These sections of 

the Act provide the Secretary with the 

authority necessary to carry out the 

administration of the Medicare program. 

Section 1861 of the Act defines services, 

supplier types and benefits, and over 

whom Medicare may have authority. 

Section 1861(d) defines the term 

‘‘supplier.’’ Section 1834(u)(5) of the 

Act governs accreditation of home 

infusion therapy suppliers. 

Section 1861(iii)(3)(D)(i)(III) of the Act 

requires that home infusion therapy 

suppliers be accredited by an 

organization designated under section 

1834(u)(5)of the Act. Section 1834(u)(5) 

of the Act requires that the Secretary 

establish factors in designating 

accrediting organizations and designate 

accrediting organizations to accredit 

suppliers furnishing home infusion 

therapy by January 1, 2021. 

Proposed § 488.1000(a) would set 

forth the statutory authority for the 

accreditation of home infusion therapy 

suppliers by the home infusion therapy 

AOs. Title 42 CFR 488.1000(b) would 

set forth the scope of the proposed 

regulation, which is the application and 

reapplication procedures for national 

AOs seeking approval or re-approval of 

authority to accredit home infusion 

therapy suppliers; ongoing CMS 

oversight processes for approved of 

home infusion therapy AOs; and, appeal 

procedures for AOs of home infusion 

therapy suppliers. 

(2) Definitions (§ 488.1005) 

We are proposing to use the following 

definitions at § 488.1005: 

• Accredited home infusion therapy 

supplier means a supplier that has 

demonstrated substantial compliance 

with a CMS-approved national home 

infusion therapy AO’s applicable CMSapproved home infusion therapy 

accreditation program standards, which 

meet or exceed those of Medicare, and 

has been awarded accreditation by that 

AO. 

• Qualified home infusion therapy 

supplier means an entity that meets the 

following criteria which are set forth at 

1861(iii)(3)(D)(i): (1) Furnishes infusion 

therapy to individuals with acute or 

chronic conditions requiring 

administration of home infusion drugs; 

(2) ensures the safe and effective 


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provision and administration of home 

infusion therapy on a 7-day-a-week, 24- 

hour-a-day basis; (3) is accredited by an 

organization designated by the Secretary 

pursuant to section 1834(u)(5); and (4) 

meets such other requirements as the 

Secretary determines appropriate. 

• Immediate jeopardy means a 

situation in which the provider’s or 

supplier’s non-compliance with one or 

more Medicare accreditation 

requirements has caused, or is likely to 

cause, serious injury, harm, impairment, 

or death to a patient, as codified at 

§ 488.1. 

• National accrediting organization 

means an organization that accredits 

supplier entities under a specific 

program and whose accredited supplier 

entities under each program are widely 

dispersed geographically across the 

United States. In addition, the specific 

program is active, fully implemented, 

and operational. This definition is 

codified at § 488.1. 

• Reasonable assurance means an AO 

has demonstrated to CMS’ satisfaction 

that its accreditation program 

requirements meet or exceed the 

Medicare program requirements. This 

definition is codified at § 488.1. 

• Rural area means an area as defined 

at section 1886(d)(2)(D) of the Act. 

• Substantial allegation of noncompliance means a complaint from any 

of a variety of sources (such as patient, 

relative, or third party), including 

complaints submitted in person, by 

telephone, through written 

correspondence, or in the newspaper, 

magazine articles or other media, that 

would, if found to be present, adversely 

affect the health and safety of patients 

and raises doubts as to a supplier’s 

compliance with any of the Medicare 

home infusion therapy accreditation 

requirements. This definition is codified 

at § 488.1. 

(3) Application and Reapplication 

Procedures for National Accrediting 

Organizations (§ 488.1010) 

Proposed § 488.1010 would contain 

application and re-application 

procedures for all national AOs seeking 

CMS-approval of an accreditation 

program for home infusion therapy 

suppliers. Proposed § 488.1010(a) would 

provide a comprehensive listing of the 

information, supporting documentation, 

certifications, written statements and 

other data that prospective AOs for 

home infusion therapy suppliers would 

be required to include in their 

application for approval to accredit 

home infusion therapy suppliers. The 

requirements under this section would 

apply to both initial applications for 

CMS-approval as well as applications 

for re-approval of an existing CMSapproved home infusion therapy 

accreditation program. This section 

would also require the AOs for home 

infusion therapy supplies to furnish 

CMS with information that 

demonstrates that their accreditation 

program requirements meet or exceed 

the applicable Medicare requirements. 

Proposed § 488.1010(a)(1) would 

require AOs for home infusion therapy 

suppliers seeking initial or renewed 

CMS-approval of their home infusion 

therapy accreditation program to 

demonstrate that they meet the 

definition of a ‘‘national accrediting 

organization.’’ Section 1865 of the Act 

requires that accrediting organizations 

be national in scope. 

We believe that because home 

infusion therapy suppliers are located 

throughout the country, it is necessary 

for AOs to demonstrate their ability to 

provide accreditation services in a 

variety of regions across the country. In 

the May 22, 2015 final rule entitled, 

‘‘Medicare and Medicaid Programs: 

Revisions to Deeming Authority, 

Survey, Certification and Enforcement 

Procedures’’ (80 FR 29802), we stated 

that the term ‘‘national in scope’’ 

indicated a program already fully 

implemented, operational, and widely 

dispersed geographically throughout the 

country. However, we also stated that 

we would not establish a minimum or 

a specific geographic distribution for 

provider entities that the program must 

have already accredited. It is our intent 

that this proposed section would require 

a home infusion therapy AO to 

demonstrate that their accreditation 

program meets the ‘‘national in scope’’ 

description as previously defined. 

Proposed § 488.1010(a)(2) would 

require AOs to specifically identify the 

Medicare supplier type for which they 

are requesting CMS-approval or 

reapproval. We believe it is necessary 

for an AO to establish separate 

accreditation requirements for each 

supplier type they accredit. There are 

many AOs that provide accreditation 

programs for multiple types of provider 

and supplier types. When we receive an 

application from such an AO, we would 

not know which type of accreditation 

program the AO has submitted for CMS 

approval. For example, the AO could be 

submitting a renewal application for one 

of its existing accreditation programs. 

Therefore, it is helpful to CMS if the AO 

identifies the type of accreditation for 

which they are seeking approval at the 

beginning of the application. 

Proposed § 488.1010(a)(3) would 

require AOs to demonstrate their ability 

to take into account the capacities of 

home infusion therapy suppliers in 

rural areas (as defined in section 

1834(u)(5)(A)(ii) of the Act. Rural home 

infusion therapy suppliers may have 

limitations or access to care issues that 

do not apply to suburban and urban 

home infusion therapy suppliers. These 

limitation may include, but are not 

limited to the number of home infusion 

therapy suppliers available in rural 

areas and limited home infusion therapy 

services offered in rural areas. While we 

certainly would not permit AOs that 

accredit any type of supplier to modify 

their accreditation standards for 

suppliers in rural areas, these factors 

must be taken into account as in 

accordance with section 

1834(u)(5)(A)(ii) of the Act. 

Proposed § 488.1010(a)(4) would 

require the home infusion therapy AO 

to provide information that documents 

their knowledge, expertise, and 

experience in the healthcare field for 

which they offer accreditation and for 

which they are requesting approval. We 

believe that to successfully develop 

accreditation program standards that 

can provide CMS with reasonable 

assurance that accredited home infusion 

therapy suppliers meet or exceed each 

of the applicable Medicare 

requirements, evaluate compliance, 

support entities in their efforts to 

identify and implement necessary 

corrective actions and monitor ongoing 

compliance, an AO must possess subject 

matter expertise and experience in that 

field. 

Proposed § 488.1010(a)(5) would 

require the AO to submit a detailed 

crosswalk (in table format) that 

identifies, for each of the applicable 

Medicare health and safety 

requirements, the exact language of the 

accrediting organization’s comparable 

accreditation requirements and 

standards. This requirement would 

allow CMS to evaluate whether the 

accreditation program standards meet or 

exceed the applicable Medicare 

requirements. We note that an AO for 

home infusion therapy suppliers could 

set standards that exceed the Medicare 

requirements in the accreditation 

program it submits to CMS for approval. 

However, at a minimum, AOs for home 

infusion therapy suppliers would have 

to provide evidence that their 

accreditation program utilizes standards 

and procedures that met or exceeded 

applicable Medicare requirements. 

Proposed § 488.1010(a)(6) would 

require each AO for home infusion 

therapy suppliers to provide a detailed 

description of its survey process. This 

requirement is intended to allow CMS 

to gain a better understanding of an 

AO’s proposed survey process and 

ensure that its survey and enforcement 


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processes are comparable to Medicare’s 

health and safety standards (contained 

in 42 CFR part 486, subpart I). The 

specific type of information to be 

provided under this section is set forth 

in proposed § 488.1010(a)(6)(i) through 

(vii) and includes, but is not limited to, 

the following: (1) A detailed description 

of the survey process; (2) type and 

frequency of surveys performed; (3) 

copies of the AO’s survey forms; (4) 

documentation that the survey reports 

identify the comparable Medicare home 

infusion therapy health and safety 

requirements for each finding of noncompliance with accreditation 

standards; (5) timeline and procedures 

for monitoring home infusion therapy 

suppliers found to be out of compliance; 

(6) process for addressing deficiencies; 

and (7) the ability of the AO to conduct 

timely review of accreditation 

applications. 

We propose at § 488.1010(a)(6)(viii) to 

require the AOs for home infusion 

therapy suppliers to acknowledge, that 

as a condition for CMS approval, the AO 

agrees to provide CMS with information 

extracted from each accreditation onsite 

survey, offsite audit or other evaluation 

strategy as part of its data submission 

required under § 488.1010(a)(21)(ii). 

Upon request, the AO must also provide 

CMS with a copy of the most recent 

accreditation onsite survey, offsite 

audit, or other evaluation strategy 

together and any other information 

related to the survey process as CMS 

may require, including, but not limited 

to corrective action plans. 

Proposed § 488.1010(a)(6)(ix) would 

require the AOs for home infusion 

therapy suppliers to provide a statement 

acknowledging that they will notify 

CMS within two business days, using a 

CMS specified format, when an 

accreditation survey or complaint 

investigation identifies the presence of 

an immediate jeopardy situation. For 

purposes of this section, the term 

‘‘immediate jeopardy’’ is defined in 

proposed § 488.1005. 

We propose at § 488.1010(a)(7) to 

require the AOs for home infusion 

therapy suppliers to establish 

procedures related to performance of 

onsite surveys, offsite audits, and other 

survey activities. Proposed 

§ 488.1010(a)(7)(i) would require the 

home infusion therapy AOs that 

performs onsite surveys to make sure 

that they are unannounced and that they 

establish procedures to prevent against 

unannounced surveys from becoming 

known to the supplier in advance of the 

visit. The purpose of unannounced 

onsite surveys is to prevent the supplier 

from performing significant 

preparations for the survey to the extent 

that their environment would be so 

modified that it does not represent the 

normal daily operating conditions of the 

home infusion therapy supplier’s office. 

If a provider is given advanced notice of 

a survey, they may attempt to make 

extensive preparations for the survey to 

the extent that they may attempt to hide 

patient safety issues such as a broken or 

malfunctioning medication infusion 

pump, areas of risk such as infection 

control, and ensuring that the patient 

receives the correct type and dosage of 

medication, poor quality of care such as 

failure to properly cleanse the insertion 

site before inserting IV access, and 

failure to perform periodic IV site care, 

or non-compliance that would normally 

be present. 

Proposed § 488.1010(a)(7)(ii) would 

require home infusion therapy AOs that 

use offsite audits, or other evaluation 

strategies to evaluate the quality of 

services provided by a home infusion 

therapy supplier, to follow up these 

offsite audits with periodic onsite visits. 

We believe that it is very important for 

the AOs that accredit home infusion 

therapy suppliers to follow-up off-site 

survey reviews with periodic on-site 

visits to ensure that the home infusion 

therapy supplier is complying with all 

accreditation standards and meeting all 

health and safety regulations. The 

requirements of this section are 

consistent with existing CMS policy 

related to the performance of 

unannounced surveys specified in 

Chapter 2 of the CMS State Operations 

Manual (SOM). Chapter 2 of the State 

Operations Manual (SOM) applies to 

Medicare-certified providers and 

suppliers. Our intent for referencing 

Chapter 2 of the SOM is to show that the 

proposed provisions related to onsite 

surveys for home infusion therapy 

suppliers are consistent with the 

requirements for Medicare-certified 

providers and suppliers. Also, it is our 

intent is to have consistent regulations 

for the approval and oversight of AOs, 

to the extent possible, across all AOs. 

We propose at § 488.1010(a)(8), to 

require an AO for home infusion 

therapy suppliers to provide a 

description of the criteria for 

determining the size and composition of 

the onsite survey or offsite audit teams 

or teams used for other accreditation 

evaluation strategies. These teams 

would perform onsite surveys at 

individual home infusion therapy 

supplier locations, offsite audits, and 

any other types of accreditation review 

activity that is performed by the AO. 

The AO’s criteria should include, but 

not be limited to, the following 

information: 

• The expected number of individual 

home infusion therapy supplier 

locations to be surveyed using an onsite 

survey. 

• The expected number of home 

infusion therapy suppliers to be 

surveyed using off-site audits. 

• A description of other types of 

accreditation review activities to be 

used. 

• The reasons for each type of survey 

(that is, initial accreditation survey, 

reaccreditation survey; and complaint 

surveys). 

Adherence to the requirements of this 

section would help CMS ensure that 

each home infusion therapy AO has 

established criteria for determining the 

appropriate size and composition of its 

survey teams. It is important that an AO 

assemble survey teams that are large 

enough and have the required 

knowledge, experience and training to 

properly and adequately survey home 

infusion therapy suppliers. We believe 

that surveys performed by competent, 

well trained surveyor teams would 

provide CMS with reasonable assurance 

that accredited home infusion therapy 

suppliers meet or exceed the applicable 

quality standards. 

We propose at § 488.1010(a)(9) to 

require that an AO for home infusion 

therapy suppliers provide CMS with 

information regarding the overall 

adequacy of the number of surveyors, 

auditors, and other staff available to 

perform all survey related activities. 

Under this section, the home infusion 

therapy AO would also be required to 

provide an explanation as to how it 

would maintain an adequate number of 

trained surveyors on staff. The home 

infusion therapy AO must also describe 

its ability to increase the size of survey, 

audit, and other survey program staff to 

match growth in the number of 

accredited home infusion therapy 

suppliers while maintaining reaccreditation intervals for existing 

accredited home infusion therapy 

suppliers. The intent of these proposed 

requirements is to ensure that AOs for 

home infusion therapy suppliers 

maintain sufficient staffing levels over 

time which would enable them to meet 

the needs of their clients and also 

perform timely and accurate surveys. 

We recognize that within a given 

accreditation program, there can be 

variations in the size and complexity of 

individual home infusion therapy 

suppliers. Therefore, we believe that 

adding a regulatory requirement to 

specify a uniform size and composition 

of an AO survey teams would not be 

appropriate. 

We propose at § 488.1010(a)(10) to 

require that an AO for home infusion 


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therapy suppliers provide CMS with 

detailed information about the 

individuals who perform survey 

activities, including onsite surveys, 

offsite audits and other review 

processes, for the purpose of ensuring 

accredited home infusion therapy 

suppliers maintain adherence to the 

accreditation program requirements. 

More specifically, proposed 

§ 488.1010(a)(10)(i) would require the 

AOs to furnish information about the 

numbers of professional and technical 

staff available for accreditation related 

activities, as well as the educational 

background and experience 

requirements for its surveyors, auditors 

and reviewers. Proposed 

§ 488.1010(a)(10)(ii) would require the 

AO to provide information about the 

educational, past experience and 

employment requirements surveyors 

must meet. Proposed 

§ 488.1010(a)(10)(iii) would require the 

AO to provide information about the 

content and length of the orientation 

program for newly hired surveyors, 

auditors and reviewers. 

These requirements would help 

ensure that AOs for home infusion 

therapy suppliers hires survey team staff 

members that possess the requisite 

knowledge, expertise, training, and 

experience specific to home infusion 

therapy suppliers. We believe it is 

imperative that surveys be performed by 

properly educated and trained staff in 

order to be valid and accurate. This 

proposed section is also intended to 

help ensure that the home infusion 

therapy AO maintains an adequate 

number of properly trained surveyors so 

that it would be able to meet the 

demand for all surveys, both initial and 

re-accreditation, to be performed for all 

clients. 

We propose at § 488.1010(a)(11) to 

require each AO for home infusion 

therapy suppliers to describe the 

content, frequency and types of inservice training provided to survey and 

audit personnel. This requirement 

would help ensure that AO personnel 

who perform surveys, audits and other 

review-related activities maintain the 

skills and knowledge necessary to 

perform their work with competency. 

We believe that surveys performed by 

competent, well trained surveyor teams 

would provide CMS with reasonable 

assurance that accredited home infusion 

therapy suppliers meet or exceed the 

applicable quality standards. 

We propose at § 488.1010(a)(12) to 

require AOs for home infusion therapy 

suppliers to provide documentation 

which describes the evaluation systems 

used to monitor the performance of 

individual surveyors, survey teams, and 

staff that perform audit activities. This 

proposed requirement would provide 

CMS with insight into how each home 

infusion therapy AO measures the 

performance of their surveyors, survey 

teams and staff that perform audit 

activities. This requirement would 

provide CMS with the ability to assess 

whether an AO has a credible process 

for ongoing evaluations of its surveyors, 

survey teams, and staff that perform 

audit activities. 

We believe that the performance 

evaluation of a home infusion therapy 

AO’s surveyors, survey team and other 

staff that perform survey and audit 

activities can have a significant impact 

on the effectiveness of the home 

infusion therapy AO’s survey processes. 

We propose at § 488.1010(a)(13) to 

require the AO for home infusion 

therapy suppliers to provide the 

organization’s policies and procedures 

for avoiding and handling conflicts of 

interest, including the appearance of 

conflicts of interest, involving 

individuals who conduct surveys, 

audits or participate in accreditation 

decisions. This proposed provision 

would help CMS to determine if home 

infusion therapy AO has policies to 

avoid potential conflicts of interest that 

could undermine the integrity of its 

accreditation program. 

We propose at § 488.1010(a)(14) to 

require the AO for home infusion 

therapy suppliers to provide CMS with 

documentation of its policies and 

procedures for handling disputes filed 

by a home infusion therapy supplier 

regarding survey or audit findings, or an 

adverse decision. The intent of this 

proposed section is to ensure that a 

home infusion therapy AO has 

procedures in place to ensure that those 

suppliers who wish to dispute the AO’s 

survey findings or appeal an adverse 

decision are provided with notice of 

their organizational and statutory appeal 

rights. 

We propose at § 488.1010(a)(15) to 

require that home infusion therapy AOs 

provide CMS with copies of the policies 

and procedures to be used when an 

accredited home infusion therapy 

supplier either—(1) removes or ceases 

furnishing services for which they are 

accredited; or (2) adds home infusion 

therapy services for which they are not 

accredited. This proposed requirement 

would ensure there is timely 

communication between the accredited 

home infusion therapy supplier and the 

AO, when changes in the supplier’s 

circumstances occur that would have an 

impact on the status of their 

accreditation. 

We propose at § 488.1010(a)(16) to 

require the home infusion therapy AOs 

to provide CMS with the organization’s 

policies and procedures for responding 

to and investigating complaints and 

grievances against accredited suppliers. 

These policies and procedures should 

include a specific procedure for 

coordinating with and making referrals, 

when applicable, to the appropriate 

licensing bodies, ombudsman’s offices 

and CMS. It is our intent that each CMSapproved home infusion therapy AO 

has policies and procedures in place for 

handling complaints and grievances. We 

believe it is important that any 

complaints against an accredited home 

infusion therapy supplier be 

investigated promptly and fairly. It is 

also important that the appropriate 

referrals be made when necessary. 

We propose at § 488.1010(a)(17) to 

require that the home infusion therapy 

AOs furnish a description of the AO’s 

accreditation status decision-making 

process. Proposed § 488.1010(a)(17)(i) 

would require the organization to 

furnish its process for addressing a 

home infusion therapy supplier 

deficiencies with meeting accreditation 

program requirements. This section 

would also require the home infusion 

therapy AO to provide a description of 

the procedures used to monitor the 

correction of deficiencies identified 

during the accreditation survey and 

audit process. It is important for CMS to 

ensure that the home infusion therapy 

AOs are properly addressing the home 

infusion therapy supplier’s deficiencies 

and requiring appropriate corrective 

action. 

We propose at § 488.1010(a)(17)(ii) to 

require that the home infusion therapy 

AOs furnish a description of all types 

and categories of accreditation decisions 

associated with the program, including 

the duration of each of the 

organization’s accreditation decisions. 

Proposed § 488.1010(a)(17)(iii) would 

require the home infusion therapy AO 

to provide information about its 

procedures for the granting, withholding 

or removal of accreditation status for 

home infusion therapy suppliers that 

fail to meet the AO’s standards or 

requirements. This proposed section 

would also require the home infusion 

therapy AO to identify the procedures 

related to assignment of less than full 

accreditation status or other actions 

taken by the home infusion therapy AO 

in response to non-compliance with its 

standards and requirements. Since the 

granting of full or less than full 

accreditation status is an essential 

component of a home infusion therapy 

AO’s accreditation decision process, we 

believe that it is necessary for CMS to 

receive information on the policies and 


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procedures pertaining to these types of 

decisions as well. 

We propose at § 488.1010(a)(17)(iv) to 

require the home infusion therapy AO 

to furnish a statement acknowledging 

that the organization agrees to notify 

CMS (in a manner specified by CMS in 

subregulatory guidance) of any decision 

to revoke or terminate, withdraw, or 

revise the accreditation status of a home 

infusion therapy supplier within 3 

business days from the date the 

organization takes an action. 

‘‘Revocation’’ or ‘‘termination’’ 

represents an involuntary cessation of a 

home infusion therapy supplier’s 

accreditation. A revocation or 

termination of accreditation could 

include an action taken when a home 

infusion therapy AO concludes that a 

home infusion therapy supplier is 

substantially non-compliant with 

accreditation standards and has not 

corrected its deficient practices within 

the timeframe specified by the home 

infusion therapy AO. A home infusion 

therapy AO could also revoke or 

terminate a home infusion therapy 

supplier’s accreditation due to the nonpayment of accreditation fees. We 

define the term ‘‘revised’’ accreditation 

status as a change in the accreditation 

status of a home infusion therapy 

supplier based on the formal 

accreditation status categories used by a 

home infusion therapy AO. These 

changes could include adverse changes 

that fall short of revocation, as well as 

positive changes reflecting improved 

compliance. This is in contrast to a 

‘‘withdrawal’’ which is a voluntary 

decision on the part of the home 

infusion therapy supplier to end its 

participation in the AO’s accreditation 

program. 

Our intent with this proposed 

requirement is to require that home 

infusion therapy AOs notify CMS when 

they have taken a final action 

concerning a change in the accreditation 

status of a home infusion therapy 

supplier. If a home infusion therapy 

supplier has filed a request for an 

administrative appeal of the AO’s 

decision to revoke or terminate 

accreditation, the action on the part of 

the home infusion therapy AO to revoke 

or terminate accreditation cannot be 

finalized until after the conclusion of 

the administrative appeals process. In 

this case, the home infusion therapy AO 

would be required to send notice of 

their final action to CMS no later than 

three business days after that appeals 

process has concluded and a final AO 

determination has been made. 

We propose at § 488.1010(a)(18) to 

require a home infusion therapy AOs to 

provide CMS with a list of all home 

infusion therapy suppliers currently 

accredited by that home infusion 

therapy AO. This list must include the 

type and category of accreditation held 

by each home infusion therapy supplier 

and the expiration date of each 

supplier’s current accreditation. 

We propose at § 488.1010(a)(19) to 

require that the home infusion therapy 

AOs provide CMS with a schedule of all 

survey activity (including but not 

limited to onsite surveys, offsite audits 

and other types if survey strategies), 

expected to be conducted by the home 

infusion therapy AO during the 6-month 

period following submission of the 

application. This proposed requirement 

would apply to both initial and renewal 

applications. Under this proposed 

section, the home infusion therapy AO 

would be required to provide us with its 

survey activity schedule for the 6-month 

period following submission of their 

application for approval to survey and 

accredit home infusion therapy 

suppliers. We would use the survey 

schedule to plan our survey observation 

as part of our review of the home 

infusion therapy AO’s application. 

We propose at § 488.1010(a)(20) to 

require that the home infusion therapy 

AO submit a written statement or 

document that demonstrates the 

organization’s ability to furnish CMS 

with the electronic data the home 

infusion therapy AO must report to 

CMS as required by proposed 

§ 488.1035. The information and data to 

be provided under this section would 

assist us in providing effective oversight 

of the approved home infusion therapy 

accreditation programs. This 

information is necessary for effective 

assessment and validation of the home 

infusion therapy AO’s survey process. 

These proposed regulations will 

require the AO to submit documentation 

to CMS on a periodic basis. The intent 

of this requirement is to ensure that the 

AO is able to provide CMS with the 

required data electronically. CMS is 

cutting down of the use of printed 

documents and maximizing the use of 

electronic document storage. 

We propose at § 488.1010(a)(21) to 

require that the home infusion therapy 

AO provide a description of the 

organization’s data management and 

analysis system with respect to its 

surveys and accreditation decisions. 

Proposed § 488.1010(a)(21)(i) would 

require the home infusion therapy AO 

to furnish a detailed description of how 

the home infusion therapy AO uses its 

data to assure compliance of its home 

infusion therapy accreditation program 

with the corresponding Medicare 

requirements. 

We propose at § 488.1010(a)(21)(ii) to 

require the home infusion therapy AO 

to submit a written statement in which 

the home infusion therapy AO 

acknowledges that it agrees to submit 

timely, accurate, and complete data, 

which CMS determines necessary for 

evaluation of the home infusion therapy 

AO’s performance, and which would 

not be unduly burdensome to submit. 

The data to be submitted, according to 

proposed § 488.1010(a)(21)(ii)(B) would 

include, accredited home infusion 

therapy supplier identifying 

information, survey findings, quality 

measures, and notices of accreditation 

decisions. The home infusion therapy 

AO would further agree to submit the 

necessary data according to the 

instructions and timeframes CMS 

specifies through subregulatory 

guidance. 

This data would allow CMS to obtain 

information about how the home 

infusion therapy AO would use its data 

management systems to meet or exceed 

Medicare home infusion therapy 

accreditation requirements as set forth 

in this subpart. The proposed data 

would also assist us in providing 

effective oversight of the approved 

home infusion therapy accreditation 

program. 

We propose at § 488.1010(a)(22) to 

require the home infusion therapy AO 

to furnish the three most recent annual 

audited financial statements from their 

organization. The purpose of this 

proposed requirement would be to 

verify that the home infusion therapy 

AO’s staffing, funding, and other 

resources are adequate to perform the 

required surveys, audits and related 

activities in order to maintain the home 

infusion therapy accreditation program 

on a national basis. This requirement is 

also intended to insure that a home 

infusion therapy AO has the financial 

stability to ensure ongoing, stable 

operations and longevity. 

Proposed § 488.1010(a)(23) would 

require the home infusion therapy AOs 

to provide a written statement, in which 

the home infusion therapy AO 

acknowledges, as a condition for 

approval, that the organization agrees to 

the items set forth in § 488.1010(a)(23)(i) 

through (vi). 

Proposed § 488.1010(a)(23)(i) would 

require the home infusion therapy AO 

to provide a written statement 

acknowledging that, as a condition for 

approval, that if the home infusion 

therapy AO decides to voluntarily 

terminate its accreditation program, the 

home infusion therapy AO must provide 

written notification to CMS and all 

home infusion therapy suppliers 

accredited by that AO. This written 


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notice must be provided at least 90 

calendar days in advance of the effective 

date of the home infusion therapy AOs 

decision to voluntarily terminate its 

CMS-approved accreditation program. 

This notice must contain the all of 

following information: 

• Notice that the home infusion 

therapy AO is voluntarily terminating 

its home infusion therapy accreditation 

program. 

• The effective date of the 

termination. 

• The implications for the home 

infusion therapy supplier’s payment 

status once their current term of 

accreditation expires in accordance with 

the requirements set forth at 

§ 488.1045(a). 

Proposed § 488.1010(a)(23)(ii) would 

require the home infusion therapy AO 

to provide a written statement 

acknowledging that, as a condition for 

approval, that, a home infusion therapy 

AO must provide written notification of 

an involuntary withdrawal of CMS 

approval of its home infusion therapy 

accreditation program to all its 

accredited home infusion therapy 

suppliers. This written notice must be 

provided by the home infusion therapy 

AO to all of its accredited home 

infusion therapy suppliers no later than 

30 calendar days after the public notice 

is published in the Federal Register 

announcing that CMS is withdrawing its 

approval of the accreditation program in 

accordance with the requirements at 

§ 488.1045(b). This Federal Register 

notice must state the implications for 

the providers’ or suppliers’ payment 

status once their current term of 

accreditation expires. Home infusion 

therapy suppliers would no longer be 

eligible to receive Medicare payments 

upon expiration of the current term of 

accreditation. Therefore, it is critical 

that the home infusion therapy supplier 

seek accreditation immediately through 

another CMS-approved home infusion 

therapy accreditor. 

Proposed § 488.1010(a)(23)(ii)(A) 

would require the home infusion 

therapy AO to acknowledge that they 

must send a second written notification, 

as a reminder to all accredited home 

infusion therapy suppliers within ten 

calendar days of the organization’s 

removal from the list of CMS-designated 

home infusion therapy AOs. We believe 

that this second reminder to the 

accredited home infusion therapy 

suppliers who are in danger of having 

a lapse of accreditation is very 

important. This notice would remind 

the home infusion therapy suppliers 

that they must seek another home 

infusion therapy accreditor to avoid a 

lapse in accreditation, and subsequently 

a lapse in Medicare payment. 

Proposed § 488.1010(a)(23)(ii)(B) 

would require the home infusion 

therapy AO to acknowledge that they 

will notify CMS, in writing, (either 

electronically or in hard copy format) 

within 2 business days of identification 

of an immediate jeopardy situation that 

has been identified in any accredited 

home infusion therapy supplier. An 

immediate jeopardy situation is 

presented when a provider or supplier 

exhibits a deficiency hat poses serious 

risk of harm or death to the home 

infusion therapy supplier’s patients, 

staff or visitors, or poses a hazard to the 

general public. Immediate jeopardy 

situations are of such a serious nature 

that it is important that they be 

identified and removed as quickly as 

possible. We propose the 2-day 

notification requirement because CMS 

must notified of immediate jeopardy 

situations as quickly as possible so that 

we can monitor these serious situations 

and take action as appropriate. 

We propose at § 488.1010(a)(23)(iii) to 

require the home infusion therapy AO 

to provide CMS with an annual 

summary of accreditation activity data 

and trends, including, but not limited 

to, deficiencies, complaints, 

terminations, withdrawals, denials, 

accreditation decisions, and other 

survey related activities as specified by 

CMS. We believe that it is important for 

CMS to monitor this information as part 

of our oversight of the home infusion 

therapy AOs performance. 

Proposed § 488.1010(a)(23)(iv), would 

require a home infusion therapy AO to 

work collaboratively with CMS in the 

event that CMS terminates the home 

infusion therapy AO’s approved status, 

to direct its accredited home infusion 

therapy suppliers to the remaining 

CMS-approved home infusion therapy 

AOs within a reasonable period of time. 

We would require the terminated home 

infusion therapy AO to perform this task 

because its accredited home infusion 

therapy suppliers would be left with no 

accreditation as a result of the 

termination of the home infusion 

therapy AOs CMS-approval. Therefore, 

we believe that the terminated home 

infusion therapy AO has some 

responsibility to help their accredited 

home infusion therapy suppliers seek 

alternative accreditors as soon as 

possible. 

Proposed § 488.1010(a)(23)(v), would 

require the home infusion therapy AOs 

to notify CMS of any significant 

proposed changes in its CMS-approved 

accreditation program requirements or 

survey process. Under this section, the 

home infusion therapy AO would be 

required to submit their notice of 

revised program requirements or 

changes in the survey process to CMS in 

writing no less than 60 days in advance 

of the proposed implementation date. 

As required by proposed 

§ 488.1030(c)(1), the home infusion 

therapy AO would be required to agree 

not to implement the proposed changes 

without prior written notice of 

continued program approval from CMS, 

except as provided for at 

§ 488.1030(c)(4). 

Proposed § 488.1010(a)(23)(vi), would 

require the home infusion therapy AOs 

to provide a statement acknowledging 

that if they receive a written notice from 

CMS which states that there has been a 

change in the applicable Medicare home 

infusion therapy substantive health and 

safety requirements, the home infusion 

therapy AO must provide CMS with 

proposed corresponding changes in the 

home infusion therapy accreditation 

requirements for its CMS-approved 

home infusion therapy accreditation 

program. This requirement is intended 

to ensure that the AO’s accreditation 

standards continue to meet or exceed 

those of Medicare, and that the AO’s 

survey process remains comparable 

with that of Medicare. 

Section 488.1010(a)(23)(vi) provides 

that in the event that CMS makes a 

change in the applicable home infusion 

therapy accreditation requirements, the 

home infusion therapy AO must comply 

with several requirements. First, 

proposed § 488.1010(a)(23)(vi)(A) would 

require the home infusion therapy AO 

to submit its responsive proposed 

changes in their accreditation 

requirements and survey processes to 

CMS within 30 calendar days of the date 

of the written CMS notice to the home 

infusion therapy AO or by a date 

specified in the notice, whichever is 

later. However, CMS will give due 

consideration to a home infusion 

therapy AO’s request for an extension of 

the deadline as long as it is submitted 

prior to the due date. Second, proposed 

§ 488.1010(a)(23)(vi)(B) would require 

that the home infusion therapy AO not 

implement its proposed responsive 

changes without prior written notice of 

continued program approval from CMS, 

except as provided for at 

§ 488.1030(b)(1)(v). 

Proposed § 488.1010(a)(24) would 

require the home infusion therapy AOs 

to provide CMS with a listing of the 

organization’s proposed fees for home 

infusion therapy accreditation. The 

home infusion therapy AO must notify 

CMS of any plans for reducing the 

burden and cost of accreditation to 

small or rural home infusion therapy 

suppliers. While CMS does not 


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undertake to set or regulate the fees 

charges by a home infusion therapy AO, 

we do review fees charged by AOs to 

determine whether they are reasonable 

as directed by sections 1834(u)(5)(A)(iii) 

of the Act. 

Proposed § 488.1010(b) would require 

home infusion therapy AOs to agree to 

submit any additional information, 

documentation, or attestations, 

including items not previously listed 

that CMS may deem necessary to make 

a determination for approval or denial 

of the home infusion therapy AO’s 

application. Should we require this 

additional information, we would notify 

the home infusion therapy AO of the 

request and provide the home infusion 

therapy AO with a reasonable timeframe 

to submit the requested information. 

We propose at § 488.1010(c) to allow 

a home infusion therapy AO to 

withdraw its initial application for 

CMS’s approval of its home infusion 

therapy accreditation program at any 

time before we publish the final Federal 

Register notice described at 

§ 488.1020(b). The intent of this 

provision is to provide home infusion 

therapy AOs that have encountered 

difficulty meeting the requirements 

described at § 488.1010(a) during the 

application process with the option to 

voluntarily withdraw their application 

before CMS publishes the final decision 

in the Federal Register as required by 

proposed § 488.1020(b). Proposed 

§ 488.1020(b) would require that the 

final notice, published by CMS, specify 

the basis for our decision. Because the 

Federal Register is a public forum, we 

believe it is likely that home infusion 

therapy AOs would choose to 

voluntarily withdraw their application 

instead of having information about the 

non-compliance of their home infusion 

therapy accreditation program made 

publicly available. This may be 

especially true for those home infusion 

therapy AOs that wish to reapply for 

approval of their accreditation program 

in the future. A voluntary withdrawal of 

an application by the home infusion 

therapy AO would terminate the 

application review process prior to 

publication of the final decision in the 

Federal Register. 

Proposed § 488.1010(d) would require 

CMS to complete its review of an 

application submitted by a home 

infusion therapy AO within 210 

calendar days from the date that CMS 

determines that the application is 

complete. We propose that to determine 

completeness, each application would 

be assigned to a technical review team 

upon receipt by CMS. This team would 

perform a completeness review to 

determine if the application contains all 

documents and supplemental 

information required by proposed 

§ 488.1010(a). Lastly, we propose that if 

the application is not complete, the 

review team would contact the home 

infusion therapy AO and request that 

they submit any missing information or 

documents in accordance with 

§ 488.1010(b). 

We seek public comment on the 

proposal related to the proposed 

application requirements set forth in 

proposed § 488.1010. We further seek 

comments on the burden related to the 

requirements of the application 

procedure. 

(4) Resubmitting a Request (§ 488.1015) 

Proposed § 488.1015(a) would require 

that except as provided in paragraph (b), 

a home infusion therapy AO whose 

request for CMS’s approval or reapproval of a home infusion therapy 

accreditation program was denied, or an 

organization that has voluntarily 

withdrawn an initial application, could 

resubmit its application if the 

organization had: (1) Revised its 

accreditation program to address the 

issues related to the denial of its 

previous request or its voluntary 

withdrawal; and (2) resubmitted the 

application in its entirety. 

Proposed § 488.1015(b) would 

provide that a home infusion therapy 

AO that had asked for reconsideration of 

an application denial by CMS could not 

submit a new application until the 

pending reconsideration was 

administratively final. This provision 

would ensure that review of 

accreditation matters on reconsideration 

are pending before only one 

administrative agency and one 

administrative level at a time. 

We seek public comments on the 

requirements of proposed § 488.1015. 

(5) Public Notice and Comment 

(§ 488.1020) 

Proposed § 488.1020(a) would require 

CMS to publish a notice in the Federal 

Register upon receipt of a complete 

application package. The notice would 

identify the organization, the type of 

home infusion therapy suppliers 

covered by the accreditation program, 

and provides for at least a 30-day public 

comment period (which begins on the 

date of publication of the Federal 

Register notice). The purpose of the 

Federal Register notice is to notify the 

public that a national AO has filed an 

application for approval of a home 

infusion therapy accreditation program 

and to seek public comment in response 

to this application. The requirement for 

the publication of a notice in the 

Federal Register when an application is 

received is an existing regulatory 

procedural requirement for all other AO 

types. We have added this requirement 

to the home infusion therapy AO 

approval and oversight regulations for 

consistency. 

Proposed § 488.1020(b) would require 

that when CMS approves or re-approves 

an application for approval of a home 

infusion therapy AO’s accreditation 

program, a final notice would be 

published in the Federal Register. This 

notice would have to specify the basis 

for CMS’ decision. Proposed 

§ 488.1020(b)(1), would require that our 

final notice include at a minimum, the 

following information: (1) How the 

accreditation program met or exceeded 

Medicare accreditation program 

requirements; (2) the effective date of 

the CMS approval, which is not later 

than the publication date of the notice; 

and (3) the term of the approval (6 years 

or less). 

If CMS makes a decision to 

disapprove a home infusion therapy 

AOs application, our final notice would 

state the deficiencies found in the 

application and the reason why the AOs 

accreditation program did not met or 

exceeded Medicare accreditation 

program requirements. However, an AO 

has the option of voluntarily 

withdrawing its application at any time 

up until the publication of the final 

notice. 

We propose at § 488.1020(b)(2) that if 

CMS did not approve a home infusion 

therapy AO’s application for approval of 

its home infusion therapy accreditation 

program, the final notice would explain 

how the home infusion therapy AO 

failed to meet Medicare home infusion 

therapy accreditation program 

requirements. This notice would 

indicate the effective date of the 

decision. 

We seek comment on the 

requirements of proposed § 488.1020, 

including on the appropriate term for 

approval of an AO. 

(6) Release and Use of Accreditation 

Surveys (§ 488.1025) 

Proposed § 488.1025 would require a 

home infusion therapy AO to include, 

in its accreditation agreement with each 

home infusion therapy supplier, an 

acknowledgement that the home 

infusion therapy supplier agrees to 

release to CMS a copy of its most 

current accreditation survey and any 

information related to the survey that 

CMS may require, including the home 

infusion therapy supplier’s corrective 

action plans. Proposed § 488.1025(a) 

would provide that CMS may determine 

that a home infusion therapy supplier 

does not meet the applicable Medicare 


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conditions or requirements on the basis 

of its own investigation of the 

accreditation survey or any other 

information related to the survey. 

Proposed § 488.1025(b) would 

prohibit CMS from disclosing home 

infusion therapy survey reports or 

survey related information according to 

section 1865(b) of the Act. However, 

CMS would be permitted to publically 

disclose an accreditation survey and 

information related to the survey, upon 

written request, to the extent that the 

accreditation survey and survey 

information is related to an enforcement 

action taken by CMS. 

CMS would use the home infusion 

therapy supplier accreditation survey 

information for purposes such as: (1) 

Confirmation of the home infusion 

therapy supplier’s eligibility for 

Medicare participation; (2) to review 

and approve the home infusion therapy 

AO’s recommendations regarding 

accreditation; (3) to review the home 

infusion therapy AO’s investigations of 

complaints; and (4) to review the 

corrective action taken by the AO when 

deficiencies are found on survey. 

We seek public comments on the 

requirements of proposed § 488.1025. 

(7) Ongoing Review of Accrediting 

Organizations (§ 488.1030) 

Proposed § 488.1030 would clarify 

that a formal accreditation program 

review could be opened on an ongoing 

basis. Specifically, this section would 

describe standardized requirements 

related to the ongoing federal review of 

home infusion therapy AOs and their 

approved accreditation programs. This 

proposed section would clarify that 

CMS oversight of accreditation 

programs is consistent across home 

infusion therapy AOs. We are 

committed to treating all home infusion 

therapy AOs subject to our oversight in 

the same manner. Under proposed 

§ 488.1030, we could conduct the 

following three types of reviews of an 

AOs home infusion therapy 

accreditation programs: (1) Performance 

review; (2) comparability review; and 

(3) CMS-approved accreditation 

program review. 

Proposed § 488.1030(a) would allow 

CMS to perform a performance review, 

in which we would evaluate the 

performance of each CMS-approved 

home infusion therapy accreditation 

program on an ongoing basis. 

Specifically, we would review the 

following aspects of a home infusion 

therapy AO’s for home infusion therapy 

program performance: The 

organization’s survey activity, and the 

organization’s continued fulfillment of 

the requirements stated in § 488.1010. 

Proposed § 488.1030(b) would allow 

CMS to perform a comparability review 

to assess the equivalency of a home 

infusion therapy AO’s CMS-approved 

home infusion therapy accreditation 

program requirements with comparable 

Medicare home infusion therapy 

accreditation requirements. Proposed 

§ 488.1030(b)(1) would allow CMS to 

perform a comparability review when 

CMS imposes new or revised Medicare 

accreditation requirements. When this 

occurs, proposed § 488.1030(b)(1) would 

require CMS to provide written notice to 

the home infusion therapy AOs when 

changes have been made to the 

Medicare home infusion therapy 

accreditation requirements. Proposed 

§ 488.1030(b)(2) would require the home 

infusion therapy accrediting 

organization to make revision to its 

home infusion therapy accreditation 

standards or survey process so as to 

incorporate the new or revised Medicare 

accreditation requirements. 

Proposed § 488.1030(b)(3) would 

further require that the written notice 

sent by CMS to the home infusion 

therapy AO specify a deadline (not less 

than 30 days) by which the home 

infusion therapy AO must prepare and 

submit their proposed home infusion 

therapy accreditation program 

requirement revisions and the 

timeframe for implementation. Proposed 

§ 488.1030(b)(4) would allow a home 

infusion therapy AO to submit a written 

request for an extension of the 

submission deadline as long as this 

request was submitted prior to the 

original deadline. 

Proposed at § 488.1030(b)(5) would 

require that, after completing the 

comparability review, CMS would 

provide written notification to the home 

infusion therapy AO, specifying 

whether or not their revised home 

infusion therapy accreditation program 

standards continued to meet or exceed 

all applicable Medicare requirements. 

We propose at § 488.1030(b)(6) that if, 

no later than 60 days after receipt of the 

home infusion therapy AO’s proposed 

accreditation standard changes, CMS 

did not provide the written notice to the 

home infusion therapy AO, then the 

revised home infusion therapy program 

accreditation standards would be 

deemed to meet or exceed all applicable 

Medicare requirement and the 

accreditation program would have 

continued CMS-approval without 

further review or consideration. 

Proposed § 488.1030(b)(7) would 

provide that if a home infusion therapy 

AO was required to submit a new 

application because CMS imposed new 

regulations or made significant 

substantive revisions to the existing 

regulations, CMS would provide notice 

of the decision to approve or disapprove 

the application within the time period 

specified in § 488.1010(d). 

We propose at § 488.1030(b)(8) that if 

a home infusion therapy AO failed to 

submit its proposed changes within the 

required timeframe, or failed to 

implement the proposed changes that 

had been determined by CMS to be 

comparable, CMS could open an 

accreditation program review in 

accordance with § 488.1030(d). 

When a home infusion therapy AO 

proposes to adopt new home infusion 

therapy accreditation standards or 

changes, in its survey process, we 

propose at § 488.1030(c)(1) to require 

the home infusion therapy AO to 

provide notice to CMS no less than 60 

days prior to the planned 

implementation date of the proposed 

changes. Proposed § 488.1030(c)(2) 

would prohibit the home infusion 

therapy AO from implementing these 

changes before receiving CMS’ approval 

except as provided in § 488.1030(c)(4). 

Proposed § 488.1030(c)(3) would require 

that this written notice contain a 

detailed description of the changes to be 

made to the organization’s home 

infusion therapy accreditation 

standards, including a detailed 

crosswalk (in table format) that states 

the exact language of the revised 

accreditation requirements and the 

corresponding Medicare requirements 

for each. The requirements of 

§§ 488.1030(c)(2) and 488.10(c)(3) 

would ensure that the home infusion 

therapy AO provides CMS with advance 

notice of any proposed changes to their 

home infusion therapy accreditation 

requirements and survey processes. This 

notice would allow CMS time to review 

these proposed changes to ensure that 

the revised home infusion therapy 

accreditation standards and survey 

processes continue to meet or exceed all 

applicable Medicare home infusion 

therapy requirements and continue to be 

comparable to all applicable Medicare 

home infusion therapy survey 

processes, and provide a response to the 

home infusion therapy AO. This section 

would also prohibit home infusion 

therapy AOs from implementing any of 

the proposed changes in their home 

infusion therapy accreditation 

requirements and survey processes, 

until CMS approval has been received. 

We seek comment on this proposal. 

Proposed § 488.1030(c)(4) would 

require CMS to provide written notice to 

the home infusion therapy accrediting 

organization indicating whether the 

home infusion therapy accreditation 

program, including the proposed 

revisions, continued or does not 


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continue to meet or exceed all 

applicable Medicare home infusion 

therapy requirements. If CMS found that 

the accrediting organization’s home 

infusion therapy accreditation program, 

including the proposed revisions did 

not continue to meet or exceed all 

applicable Medicare home infusion 

therapy requirements. CMS would have 

to state the reasons for these findings. 

Proposed § 488.1030(c)(5) would 

require CMS to provide this written 

notice to the home infusion therapy AO 

by the 60th calendar day following 

receipt of the home infusion therapy 

AO’s written proposed changes as to 

whether the home infusion therapy 

AO’s revised home infusion therapy 

accreditation program standards and 

survey processes have been be deemed 

to meet or exceed all applicable 

Medicare home infusion therapy 

requirements and have continued CMS 

approval without further review or 

consideration. This proposed section 

would further specify that if CMS failed 

to provide the required written notice to 

the home infusion therapy AO by the 60 

day deadline, the home infusion therapy 

AO’s revised accreditation program 

standards would be deemed to meet or 

exceed all applicable Medicare 

requirements and have continued CMS 

approval without further review or 

consideration. 

Proposed § 488.1030(c)(5) would 

permit CMS to open an accreditation 

program review, in accordance with 

proposed § 488.1030(d), if a home 

infusion therapy AO implemented 

changes to their home infusion therapy 

accreditation requirements or survey 

process that were not determined nor 

deemed by CMS to be comparable to the 

applicable Medicare requirements. 

We propose at § 488.1030(d) to permit 

CMS to initiate an accreditation 

program review when a comparability 

or performance review reveals evidence 

that a home infusion therapy AO’s 

CMS–approved home infusion therapy 

accreditation program is in substantial 

non-compliance with the requirements 

of the proposed home infusion therapy 

health and safety regulations contained 

in 42 CFR part 486, subpart B. Proposed 

§ 488.1030(d)(1) would require CMS to 

provide written notice to the home 

infusion therapy AO when a home 

infusion therapy accreditation program 

review is initiated. Proposed 

§ 488.1030(d)(1)(i) through (iv) would 

set forth the requirements for this 

written notice, which should contain 

the following information: (i) A 

statement of the instances, rates or 

patterns of non-compliance identified, 

as well as other related information, if 

applicable; (ii) a description of the 

process to be followed during the 

review, including a description of the 

opportunities for the home infusion 

therapy AO to offer factual information 

related to CMS’ findings; (iii) a 

description of the possible actions that 

may be imposed by CMS based on the 

findings of the accreditation program 

review; and, (iv) the actions the home 

infusion therapy AO would have to take 

to address the identified deficiencies, 

and the length of the accreditation 

program review probation period, which 

will include monitoring of the home 

infusion therapy AO’s performance and 

implementation of the corrective action 

plan. The probation period is not to 

exceed 180 calendar days from the date 

that CMS has approved the home 

infusion therapy AOs plan of correction 

(which is the AO written plan for 

correcting any deficiencies in its home 

infusion therapy accreditation program 

that were found by CMS on a program 

review). 

At § 488.1030(d)(2), we propose that 

CMS would review and approve the 

home infusion therapy AO’s plan of 

correction for acceptability within 30 

days after receipt. Proposed 

§ 488.1030(d)(3) would provide that 

CMS will monitor the implementation 

of the home infusion therapy 

accrediting organization’s plan of 

correction for a period not to exceed 180 

days from the date of approval. During 

the 180-day review period, CMS would 

monitor implementation of the accepted 

plan of correction as well as progress 

towards correction of identified issues 

and areas of non-compliance that 

triggered the accreditation program 

review. 

We propose at § 488.1030(d)(4) to 

authorize CMS to place the home 

infusion therapy AO’s CMS-approved 

accreditation program on probation for 

a subsequent period of up to 180 

calendar days, if necessary. The 

additional period of time may be 

necessary if CMS determines, as a result 

of the home infusion therapy 

accreditation program review or a 

review of an application for renewal of 

an existing CMS-approved accreditation 

program, that the home infusion therapy 

AO has failed to meet any of the 

requirements of § 488.1010, or has made 

significant progress correcting identified 

issues or areas of non-compliance, but 

requires additional time to complete full 

implementation of corrective actions or 

demonstrate sustained compliance. If a 

home infusion therapy AO’s term of 

approval expires before the 180-day 

period is completed, the probationary 

period will be deemed to end upon the 

day of expiration of the home infusion 

therapy AO’s term of approval. In the 

case of a renewal application where we 

have placed the home infusion therapy 

accreditation program on probation, we 

propose that any approval of the 

applications must be conditional while 

the program remains on probation. 

If we place a home infusion therapy 

AO’s accreditation program on 

probation, proposed § 488.1030(d)(4)(i) 

would require CMS to issue a written 

determination to the home infusion 

therapy AO, within 60 calendar days 

after the end of any probationary period. 

The written determination must state 

whether or not the CMS-approved home 

infusion therapy accreditation program 

continued to meet the requirements of 

this section and the reasons for the 

determination. 

If we determined that withdrawal of 

approval from a CMS-approved 

accreditation program was necessary, 

proposed § 488.1030(d)(4)(ii) would 

require CMS to send written notice to 

the home infusion therapy AO which 

contained the following information: (1) 

Notice of CMS’ removal of approval of 

the home infusion therapy AOs 

accreditation program;(2) the reason(s) 

for the removal; and (3) the effective 

date of the removal determined in 

accordance with § 488.1030(d)(4)(ii). 

If CMS withdrew the approval of a 

home infusion therapy AO accreditation 

program, proposed § 488.1030(d)(4)(iii) 

would require CMS to publish a notice 

of its decision to withdraw approval of 

the accreditation program in the Federal 

Register. This notice would have to 

include the reasons for the withdrawal, 

and a notification that the withdrawal 

would become effective 60 calendar 

days after the date of publication in the 

Federal Register. The publication of this 

Federal Register Notice is notice would 

be necessary to put interested 

stakeholders, such as the home infusion 

therapy suppliers that are accredited by 

the affected AO on notice about the 

withdrawal of CMS-approval of their 

AO, because this will have an effect on 

the status of their accreditation. 

Proposed § 488.1030(e) would allow 

CMS to immediately withdraw the CMS 

approval of an home infusion therapy 

AO’s home infusion therapy 

accreditation program, if at any time 

CMS makes a determination that the 

continued approval of that home 

infusion therapy accreditation program 

poses an immediate jeopardy to the 

patients of the entities accredited under 

the program; or the continued approval 

otherwise constitutes a significant 

hazard to the public health. We propose 

at § 488.1030(f) to mandate that any 

home infusion therapy AO whose CMS 

approval of its home infusion therapy 

accreditation program has been 


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withdrawn must notify, in writing, each 

of its accredited home infusion therapy 

suppliers of the withdrawal of CMS 

approval and the implications for the 

home infusion therapy suppliers’ 

payment status no later than 30 calendar 

days after the notice is published in the 

Federal Register. This requirement 

would protect the home infusion 

therapy suppliers that have received 

their accreditation from a home infusion 

therapy AO that has had its CMS 

approval of their home infusion therapy 

accreditation program removed. 

We seek public comments on the 

requirements of proposed § 488.1030. 

We further seek public comment related 

to the burden associated with the 

requirements of proposed § 488.1030. 

(8) Ongoing Responsibilities of a CMSApproved Accreditation Organization 

(§ 488.1035) 

Proposed § 488.1035 would require a 

home infusion therapy AO to provide 

certain information to CMS and carry 

out certain activities on an ongoing 

basis. More specifically proposed 

§ 488.1035(a) would require the home 

infusion therapy AO to provide CMS 

with all of the following in written 

format (either electronic or hard copy): 

• Copies of all home infusion therapy 

accreditation surveys, together with any 

survey-related information that CMS 

may require (including corrective action 

plans and summaries of findings with 

respect to unmet CMS requirements); 

• Notice of all home infusion therapy 

accreditation decisions. 

• Notice of all complaints related to 

home infusion therapy suppliers. 

• Information about all home infusion 

therapy accredited suppliers against 

which the home infusion therapy AO 

has taken remedial or adverse action, 

including revocation, withdrawal, or 

revision of the home infusion therapy 

supplier’s accreditation. 

• Summary data specified by CMS 

that relate to the past year’s home 

infusion therapy accreditation activities 

and trends which is to be provided on 

an annual basis. 

• Notice of any proposed changes in 

its home infusion therapy accreditation 

standards or requirements or survey 

process. 

Proposed § 488.1035(b) would require 

a home infusion therapy AO to submit 

an acknowledgment of receipt of CMS’ 

notification of a change in CMS 

requirements within 30 days from the 

date of the notice. Proposed 

§ 488.1035(c) would require that a home 

infusion therapy AO permit its 

surveyors to serve as witnesses if CMS 

takes an adverse action based on 

accreditation findings. 

Proposed § 488.1035(d) would require 

that within 2 business days of 

identifying a deficiency of an accredited 

home infusion therapy supplier that 

poses immediate jeopardy to a 

beneficiary or to the general public, the 

home infusion therapy AO must provide 

CMS with written notice of the 

deficiency and any adverse action 

implemented by the home infusion 

therapy AO. Proposed § 488.1035(e) 

would require that within 10 calendar 

days after our notice to a CMS-approved 

home infusion therapy AO that CMS 

intends to withdraw approval of the 

home infusion therapy AO, the home 

infusion therapy AO must provide 

written notice of the withdrawal to all 

of the organization’s accredited home 

infusion therapy suppliers. 

We seek public comment on the 

requirements of proposed § 488.1035. 

We further seek public comments 

related to the burden associated with 

the requirements of proposed 

§ 488.1035. 

(9) Onsite Observations of Accrediting 

Organization Operations (§ 488.1040) 

We propose at § 488.1040(a) and (b) to 

permit CMS to conduct an onsite 

inspection of the home infusion therapy 

AOs operations and offices at any time 

to verify the organization’s 

representations and to assess the 

organization’s compliance with its own 

policies and procedures. Activities to be 

performed by CMS staff during the 

onsite inspections may include, but are 

not limited to: (1) Interviews with 

various home infusion therapy AO staff; 

(2) review of documents, and survey 

files, audit tools and related records; (3) 

observation of meetings concerning the 

accreditation process; (4) auditing 

meetings concerning the accreditation 

process, (5) observation of in-progress 

surveys and audits; (6) evaluation of the 

home infusion therapy AO’s survey 

results and accreditation decisionmaking process. 

CMS would perform onsite visits to a 

home infusion therapy AOs offices only 

for specific reasons. For example, when 

an AO had filed an initial or renewal 

application for approval of its home 

infusion therapy accreditation program, 

CMS would perform an onsite visit to 

the AOs offices as part of the 

application review process. If CMS has 

opened a program review and put the 

home infusion therapy AO on probation 

for a 180 day period, we would perform 

an onsite visit to the AOs offices to 

check of the AOs progress in 

implementing the plan of correction. 

If CMS decides to perform on onsite 

visit to the home infusion therapy AOs 

offices, we would notify the AO. We 

would coordinate with the AO staff to 

schedule the onsite visit at mutually 

agreed upon date and time. 

The intended purpose of this section 

is to provide CMS with an opportunity 

to observe, first hand, the daily 

operations of home infusion therapy 

AOs and to ensure that the home 

infusion therapy accreditation program 

is fully implemented and operational as 

presented in the written application. 

Onsite inspections would strengthen 

our continuing oversight of the home 

infusion therapy AO performance 

because they provide an opportunity for 

us to corroborate the verbal and written 

information submitted to CMS by the 

home infusion therapy AO in their 

initial and renewal applications. In 

addition, onsite inspections would 

allow CMS to assess the home infusion 

therapy AO’s compliance with its own 

policies and procedures. 

We seek public comments on the 

requirements of proposed § 488.1040. 

We also seek comments regarding the 

burden related to § 488.1040. 

(10) Voluntary and Involuntary 

Termination (§ 488.1045) 

The proposed provisions related to 

the voluntary and involuntary 

termination of CMS approval of a home 

infusion therapy AO’s accreditation 

program are set out at proposed 

§ 488.1045. Proposed § 488.1045(a) 

would address voluntary termination of 

a home infusion therapy AO’s 

accreditation program by the home 

infusion therapy AO. A home infusion 

therapy AO that decides to voluntarily 

terminate its CMS-approved 

accreditation program must provide 

written notice to CMS and each of its 

accredited home infusion therapy 

suppliers at least 90 days in advance of 

the effective date of the termination. 

This written notice must state the 

implications for the home infusion 

therapy supplier’s payment should there 

be a lapse in their accreditation status. 

Proposed standard § 488.1045(b) 

would address CMS involuntary 

termination of a home infusion therapy 

AO’s CMS-approved accreditation 

program. Once CMS publishes the 

notice in the Federal Register 

announcing its decision to terminate the 

accrediting organization’s home 

infusion therapy accreditation program, 

the home infusion therapy AO would 

have to provide written notification to 

all home infusion therapy suppliers 

accredited under its CMS-approved 

home infusion therapy accreditation 

program no later than 30 calendar days 

after the notice was published in the 

Federal Register. This notice would 

state that CMS is withdrawing its 


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approval of the home infusion therapy 

AO’s accreditation program and the 

implications for their payment, should 

there be a lapse in their accreditation 

status. 

Proposed § 488.1045(c) addresses the 

requirements that would apply to both 

voluntary and involuntary terminations 

of CMS approval of the home infusion 

therapy AO. Proposed § 488.1045(c)(1) 

would provide that the accreditation 

status of affected home infusion therapy 

suppliers would be considered to 

remain in effect until their current term 

of accreditation expired. In the case 

where a home infusion therapy AO has 

been removed as a CMS-approved AO, 

any home infusion therapy supplier that 

is accredited by the organization during 

the period beginning on the date the 

organization was approved by CMS 

until the date the organization was 

removed, shall be considered accredited 

for its remaining accreditation period. 

Proposed § 488.1045(c)(2) would 

provide that for any home infusion 

therapy supplier, whose home infusion 

therapy AO’s CMS approval has been 

voluntarily or involuntarily terminated 

by CMS, and who wishes to continue to 

receive reimbursement from Medicare, 

must provide written notice to CMS at 

least 60-calendar days prior to its 

accreditation expiration date which 

states that the home infusion therapy 

supplier has submitted an application 

for accreditation under another CMSapproved home infusion therapy 

accreditation program. This section 

further states that failure to comply with 

this 60-calendar day requirement prior 

to expiration of their current 

accreditation status could result in a 

suspension of payment. 

Proposed § 488.1045(c)(3) would 

require that the terminated home 

infusion therapy AO must provide a 

second written notification to all 

accredited suppliers ten calendar days 

prior to the organization’s accreditation 

program effective date of termination. 

The proposed notice provisions at 

§ 488.1045(c)(2) and (3) could help 

prevent home infusion therapy 

suppliers from suffering financial 

hardship that could result from a denial 

of payment of Medicare claims if their 

home infusion therapy accreditation 

lapses as a result of the voluntary or 

involuntary termination of a CMSapproved home infusion therapy AO 

program. 

We propose at § 488.1045(d), that if a 

home infusion therapy supplier requests 

a voluntary withdrawal from 

accreditation, it will not be possible for 

the withdrawal to become effective until 

the home infusion therapy AO 

completes three required steps. First, 

the AO would have to contact the home 

infusion therapy supplier to seek 

written confirmation that the home 

infusion therapy supplier intended to 

voluntarily withdraw from the 

accreditation program. Second, the 

home infusion therapy AO would have 

to advise home infusion therapy 

supplier, in writing, of the statutory 

requirement at 1861(iii)(3)(D)(i)(III) of 

the Act for requiring accreditation for all 

home infusion therapy suppliers. Third, 

the home infusion therapy AO would 

have to advise the home infusion 

therapy supplier of the possible 

payment consequence for a lapse in 

accreditation status. Proposed 

§ 488.1045(d)(3) would require the 

home infusion therapy AO to submit 

their final notice of the voluntary 

withdrawal of accreditation by the home 

infusion therapy supplier five business 

days after the request for voluntary 

withdrawal was ultimately processed 

and effective. 

We believe that it is important that 

the home infusion therapy seek 

confirmation that the home infusion 

therapy supplier has indeed requested a 

voluntary termination of their 

accreditation. This confirmation would 

prevent the erroneous termination of the 

accreditation of a home infusion therapy 

supplier that did not request it or had 

subsequently withdrawn their request 

for voluntary termination. 

We believe that it is also important for 

the home infusion therapy AO to 

provide the required written notice to 

the home infusion therapy supplier that 

requests a voluntary withdrawal from 

accreditation, so that the home infusion 

therapy supplier has been fully 

informed of the requirements for 

accreditation according to section 

1861(iii)(3)(D)(i)(III) and the payment 

consequences of being unaccredited. If 

there is a lapse in the accreditation 

status of the home infusion therapy 

supplier, they will not be eligible to 

receive payment from Medicare for 

services furnished to Medicare 

beneficiaries. A home infusion therapy 

infusion therapy supplier that is 

unaware of this payment consequence 

could suffer financial hardship due to 

furnishing services to Medicare 

beneficiaries for which they cannot be 

reimbursed after a lapse in 

accreditation. 

We seek public comments on the 

requirements of proposed § 488.1045. 

We also seek comments regarding the 

burden related to § 488.1045. 

(11) Reconsideration (§ 488.1050) 

We propose at § 488.1050 to set forth 

the appeal process through which a 

home infusion therapy AO may request 

reconsideration of an unfavorable 

decision made by CMS. At proposed 

§ 488.1050(b)(1), the home infusion 

therapy AO would have to submit a 

written request for reconsideration 

within 30 calendar days of the receipt 

of the CMS notification of an adverse 

determination or non-renewal. Proposed 

§ 488.1050(b)(2) would require the home 

infusion therapy AOs to submit a 

written request for reconsideration 

which specifies the findings or issues 

with which the home infusion therapy 

AO disagreed and the reasons for the 

disagreement. Proposed § 488.1050(b)(3) 

would allow a home infusion therapy 

AO to withdraw their request for 

reconsideration at any time before the 

administrative law judge issues a 

decision. 

We propose at § 488.1050(c)(1) to 

establish requirements for CMS when a 

request for reconsideration has been 

received from a home infusion therapy 

AO. Specifically, CMS would be 

required to provide the home infusion 

therapy AO with: The opportunity for 

an administrative hearing with a hearing 

officer appointed by the Administrator 

of CMS; the opportunity to present, in 

writing and in person, evidence or 

documentation to refute CMS’ notice of 

denial, termination of approval, or nonrenewal of CMS approval and 

designation. Section 488.1050(c)(2) 

would require CMS to send the home 

infusion therapy AO written notice of 

the time and place of the informal 

hearing at least 10 business days before 

the scheduled hearing date. 

We propose at § 488.1050(d)(1) to 

establish rules for the administrative 

hearing such as who may attend the 

hearing on behalf of each party, 

including but not limited to legal 

counsel, technical advisors, and nontechnical witnesses that have personal 

knowledge of the facts of the case. This 

proposed section would also specify the 

type of evidence that may be introduced 

at the hearing. Specifically, we would 

specify and clarify, at proposed 

§ 488.1050(d)(4), that the hearing officer 

would not have the authority to compel 

by subpoena the production of 

witnesses, papers, or other evidence. 

Proposed § 488.1050(d)(5) would 

provide that the legal conclusions of the 

hearing officer within 45 calendar days 

after the close of the hearing. Proposed 

§ 488.1050(d)(6) would require the 

hearing officer to present his or her 

findings and recommendations in a 

written report that includes separately 

numbered findings of fact. According to 

proposed § 488.1050(d)(7), the decision 

of the hearing officer would be final. 

We seek public comments on the 

requirements of proposed § 488.1050. 


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97https://www.cms.gov/Outreach-and-Education/ 

Medicare-Learning-Network-MLN/MLNProducts/ 

DMEPOSQuality/DMEPOSQualBooklet905709.html. 

C. Payment for Home Infusion Therapy 

Services 

1. Proposed Temporary Transitional 

Payment for Home Infusion Therapy 

Services for CYs 2019 and 2020 

Section 50401 of the BBA of 2018 

(Pub. L. 115–123) amended section 

1834(u) of the Act by adding a new 

paragraph (7) that establishes a home 

infusion therapy services temporary 

transitional payment for eligible home 

infusion suppliers for certain items and 

services furnished in coordination with 

the furnishing of transitional home 

infusion drugs beginning January 1, 

2019. This temporary payment covers 

the cost of the same items and services, 

as defined in section 1861(iii)(2)(A) and 

(B) of the Act, and outlined in section 

IV.A.2 in this proposed rule, related to 

the administration of home infusion 

drugs. The temporary transitional 

payment would begin on January 1, 

2019 and end the day before the full 

implementation of the home infusion 

therapy benefit on January 1, 2021, as 

required by section 5012(d) of the 21st 

Century Cures Act. 

a. Transitional Home Infusion Drugs 

Section 1834(u)(7)(A)(iii) of the Act 

defines the term ‘‘transitional home 

infusion drug’’ using the same 

definition as ‘home infusion drug’ under 

section 1861(iii)(3)(C) of the Act, which 

is a drug or biological administered 

intravenously, or subcutaneously for an 

administration period of 15 minutes or 

more, in the home of an individual 

through a pump that is an item of DME. 

However, section 1834(u)(7)(A)(iii) of 

the Act includes an exception to the 

definition of ‘home infusion drug’ if the 

drug is identified under section 

1834(u)(7)(C) of the Act. This provision 

specifies the HCPCS codes for the drugs 

and biologicals covered under the Local 

Coverage Determinations (LCDs) for 

External Infusion Pumps. In addition, 

subsequent infusion drug additions to 

the LCDs and compounded infusion 

drugs not otherwise classified, as 

identified by HCPCS codes J7799 (Not 

otherwise classified drugs, other than 

inhalation drugs, administered through 

DME) and J7999 (Compounded drug, 

not otherwise classified), are also 

included in the definition of a 

‘transitional home infusion drug.’ 

b. Infusion Drug Administration 

Calendar Day 

Section 1834(u)(7)(E)(i) of the Act 

states that payment to an eligible home 

infusion supplier or qualified home 

infusion therapy supplier for an 

infusion drug administration calendar 

day in the individual’s home refers to 

payment only for the date on which 

professional services, as described in 

section 1861(iii)(2) of the Act, were 

furnished to administer such drugs to 

such individual. This includes all such 

drugs administered to such individual 

on such day. We believe this to mean 

that payment is only for the day on 

which the nurse is in the patient’s home 

when an infusion drug is being 

administered. As section 1861(iii)(2)(A) 

of the Act refers to the professional 

services, including nursing services, we 

believe this to mean skilled services as 

set out at 42 CFR 409.32. For the 

professional services to be necessary for 

the safe and effective administration of 

home infusion drugs, they must be 

furnished by skilled professionals in 

accordance with individual state 

practice acts. We understand that there 

may be professional services furnished 

that do not occur on a day the drug is 

being administered. However, payment 

for such home infusion therapy services 

is built into the single payment for the 

day on which the nurse is in the 

patient’s home and the drug is being 

infused. Accordingly, under section 

1834(u)(7)(D) of the Act, the temporary 

transitional payment is set equal to 4 

hours of infusion in a physician’s office 

even though the nurse may be in the 

patient’s home for a much shorter 

timeframe. In other words, payment is 

made only for the day on which the 

administration of the infusion drug 

occurs even if professional services 

were furnished on a different day. 

Therefore, we propose to define in 

regulation that payment for an infusion 

drug administration calendar day is for 

the day on which home infusion 

therapy services are furnished by skilled 

professional(s) in the individual’s home 

on the day of infusion drug 

administration. The skilled services 

provided on such day must be so 

inherently complex that they can only 

be safely and effectively performed by, 

or under the supervision of, professional 

or technical personnel. An infusion 

drug administration visit that begins in 

one calendar day and spans into the 

next calendar day would be considered 

one visit using the date the visit ended 

as the service date. We are soliciting 

comment on the proposed definition of 

infusion drug administration calendar 

day in regulation, as detailed in section 

IX of this proposed rule. 

c. Eligible Home Infusion Suppliers, 

Eligible Individuals, and Relationship to 

Home Health 

Section 1842(u)(7)(F) of the Act 

defines eligible home infusion suppliers 

as suppliers that are enrolled in 

Medicare as pharmacies that provide 

external infusion pumps and external 

infusion pump supplies, and that 

maintain all pharmacy licensure 

requirements in the State in which the 

applicable infusion drugs are 

administered. This means that existing 

DME suppliers that are enrolled as 

pharmacies that provide external 

infusion pumps and supplies are 

considered eligible home infusion 

suppliers, as are potential pharmacy 

suppliers that enroll and comply with 

the Medicare program’s supplier 

standards (found at 42 CFR 424.57(c)) 

and quality standards to become 

accredited for furnishing external 

infusion pumps and supplies.97 Home 

infusion therapy services are furnished 

by eligible home infusion suppliers in 

the individual’s home to an individual 

who is under the care of an applicable 

provider and where there is a plan of 

care established and periodically 

reviewed by a physician prescribing the 

type, amount, and duration of infusion 

therapy services. In section VI.C.2.f 

below, regarding the home infusion 

therapy benefit for CY 2021 and 

subsequent years, we are soliciting 

comments regarding the interaction 

between home infusion therapy services 

and home health services. However, for 

purposes of this proposed temporary 

transitional payment for home infusion 

therapy services for CYs 2019 and 2020, 

we anticipate the relationship between 

home infusion therapy and home health 

to be as described in section VI.C.2.f of 

this proposed rule. 

d. Payment Categories 

As outlined in section 1834(u)(7)(C) of 

the Act, identified HCPCS codes for 

transitional home infusion drugs are 

assigned to three payment categories for 

which a single payment amount will be 

established for home infusion therapy 

services furnished on each infusion 

drug administration calendar day. 

Payment category 1 includes antifungals 

and antivirals, uninterrupted long-term 

infusions, pain management, inotropic, 

and chelation drugs. Payment category 2 

includes subcutaneous immunotherapy 

infusions. Payment category 3 includes 

certain chemotherapy drugs. Table 55 

provides the complete list of J-codes 

associated with the infusion drugs that 


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98The JB modifier indicates that the route of 

administration is subcutaneous. 

fall within each of the payment 

categories. 

TABLE 55—INFUSION DRUG J-CODES ASSOCIATED WITH TEMPORARY TRANSITIONAL PAYMENT CATEGORIES FOR HOME

INFUSION THERAPY SERVICES

J-Code Drug 

Category 1: 

J0133 .................. Injection, acyclovir, 5 mg. 

J0285 .................. Injection, amphotericin b, 50 mg. 

J0287 .................. Injection, amphotericin b lipid complex, 10 mg. 

J0288 .................. Injection, amphotericin b cholesteryl sulfate complex, 10 mg. 

J0289 .................. Injection, amphotericin b liposome, 10 mg. 

J0895 .................. Injection, deferoxamine mesylate, 500 mg. 

J1170 .................. Injection, hydromorphone, up to 4 mg. 

J1250 .................. Injection, dobutamine hydrochloride, per 250 mg. 

J1265 .................. Injection, dopamine hcl, 40 mg. 

J1325 .................. Injection, epoprostenol, 0.5 mg. 

J1455 .................. Injection, foscarnet sodium, per 1,000 mg. 

J1457 .................. Injection, gallium nitrate, 1 mg. 

J1570 .................. Injection, ganciclovir sodium, 500 mg. 

J2175 .................. Injection, meperidine hydrochloride, per 100 mg. 

J2260 .................. Injection, milrinone lactate, 5 mg. 

J2270 .................. Injection, morphine sulfate, up to 10 mg. 

J2274 .................. Injection, morphine sulfate, preservative-free for epidural or intrathecal use, 10 mg. 

J2278 .................. Injection, ziconotide, 1 microgram. 

J3010 .................. Injection, fentanyl citrate, 0.1 mg. 

J3285 .................. Injection, treprostinil, 1 mg. 

Category 2: 

J1555 JB98 ......... Injection, immune globulin (cuvitru), 100 mg. 

J1559 JB ............ Injection, immune globulin (hizentra), 100 mg. 

J1561 JB ............ Injection, immune globulin, (gamunex-c/gammaked), non-lyophilized (e.g., liquid), 500 mg. 

J1562 JB ............ Injection, immune globulin (vivaglobin), 100 mg. 

J1569 JB ............ Injection, immune globulin, (gammagard liquid), non-lyophilized, (e.g., liquid), 500 mg. 

J1575 JB ............ Injection, immune globulin/hyaluronidase, (hyqvia), 100 mg immune globulin. 

Category 3: 

J9000 .................. Injection, doxorubicin hydrochloride, 10 mg. 

J9039 .................. Injection, blinatumomab, 1 microgram. 

J9040 .................. Injection, bleomycin sulfate, 15 units. 

J9065 .................. Injection, cladribine, per 1 mg. 

J9100 .................. Injection, cytarabine, 100 mg. 

J9190 .................. Injection, fluorouracil, 500 mg. 

J9200 .................. Injection, floxuridine, 500 mg. 

J9360 .................. Injection, vinblastine sulfate, 1 mg. 

J9370 .................. Injection, vincristine sulfate, 1 mg. 

The payment category for subsequent 

transitional home infusion drug 

additions to the LCDs and compounded 

infusion drugs not otherwise classified, 

as identified by HCPCS codes J7799 and 

J7999, will be determined by the 

Medicare administrative contractors. 

e. Payment Amounts 

As set out at new section 

1834(u)(7)(D) of the Act, as added by 

section 50401 of the BBA of 2018 (Pub. 

L. 115–123), each payment category will 

be paid at amounts in accordance with 

the Physician Fee Schedule for each 

infusion drug administration calendar 

day in the individual’s home for drugs 

assigned to such category without 

geographic adjustment. Table 56 

provides the payment categories 

associated with the HCPCS codes. 

TABLE 56—PAYMENT CATEGORIES FOR TEMPORARY TRANSITIONAL PAYMENT FOR HOME INFUSION THERAPY SERVICES

HCPCS code Description Units 

Category 1: 

96365 .................. Therapeutic, Prophylactic, and Diagnostic Injections and Infusions (Excludes Chemotherapy and Other Highly 

Complex Drug or Highly Complex Biologic Agent Administration)—up to one hour.

1 

96366 .................. Therapeutic, Prophylactic, and Diagnostic Injections and Infusions (Excludes Chemotherapy and Other Highly 

Complex Drug or Highly Complex Biologic Agent Administration)—each additional hour.

3 

Category 2: 

96369 .................. Therapeutic, Prophylactic, and Diagnostic Injections and Infusions (Excludes Chemotherapy and Other Highly 

Complex Drug or Highly Complex Biologic Agent Administration)—up to one hour.

1 

96370 .................. Therapeutic, Prophylactic, and Diagnostic Injections and Infusions (Excludes Chemotherapy and Other Highly 

Complex Drug or Highly Complex Biologic Agent Administration)—each additional hour.

3 

Category 3: 


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TABLE 56—PAYMENT CATEGORIES FOR TEMPORARY TRANSITIONAL PAYMENT FOR HOME INFUSION THERAPY SERVICES— 

Continued 

HCPCS code Description Units 

96413 .................. Injection and Intravenous Infusion Chemotherapy and Other Highly Complex Drug or Highly Complex Biologic

Agent Administration—up to one hour.

1 

96415 .................. Injection and Intravenous Infusion Chemotherapy and Other Highly Complex Drug or Highly Complex Biologic

Agent Administration—each additional hour.

3 

Section 1834(u)(7)(E)(ii) of the Act 

requires that in the case that two (or 

more) home infusion drugs or 

biologicals from two different payment 

categories are administered to an 

individual concurrently on a single 

infusion drug administration calendar 

day, one payment for the highest 

payment category would be made. 

f. Billing 

For eligible home infusion suppliers 

to bill for home infusion therapy 

services for an infusion drug 

administration calendar day, we will 

create three new HCPCS G-codes for 

each of the three payment categories. 

The eligible home infusion supplier 

would submit, in line-item detail on the 

claim, a G-code for every visit made by 

the nurse to provide professional 

services to the patient in his/her home 

on a day in which a drug is being 

infused. Each visit reported would 

include the length of time in which 

professional services were provided (in 

15 minute increments). However, only 

one payment would be made per 

infusion drug administration calendar 

day at the standard amount described by 

each of the payment categories noted 

previously, for a total payment 

equivalent to 4 hours per infusion drug 

administration calendar day. These Gcodes could be billed separately from or 

on the same claim as the DME, supplies, 

and infusion drug; and would be 

processed through the DME MACs. The 

supplier furnishing the DME, pump, the 

infusion drug, and other supplies must 

also provide the professional services 

under the home infusion therapy benefit 

during the temporary transitional 

payment period. 

For the purposes of this temporary 

transitional payment for home infusion 

therapy services, section 1834(u)(7)(D)(i) 

requires that payment amounts would 

be equal to the amounts determined 

under the Physician Fee Schedule 

established under section 1848 of the 

Act for services furnished during the 

year for codes and units for such codes 

specified without application of 

geographic wage adjustment under 

section 1848(e) of the Act. In the event 

that multiple drugs, which are not all 

assigned to the same payment category, 

are administered on the same infusion 

drug administration calendar day, 

section 1834(u)(7)(E)(ii) requires that a 

single payment would be made that is 

equal to the highest payment category. 

In order to implement the requirements 

of section 1834(u)(7) of the Act for this 

temporary transitional payment, we 

would issue a Change Request (CR) 

prior to implementation of this 

temporary transitional payment, 

including the G-codes needed for 

billing, outlining the requirements for 

the claims processing changes needed to 

implement this payment. 

2. Solicitation of Public Comments 

Regarding Payment for Home Infusion 

Therapy Services for CY 2021 and 

Subsequent Years 

Upon the expiration of the home 

infusion therapy services temporary 

transitional payment, we would be fully 

implementing the home infusion 

therapy services payment system under 

section 1834(u)(1) of the Act, as added 

by section 5012 of the 21st Century 

Cures Act (Pub. L. 114–255). In 

anticipation of future rulemaking, we 

are soliciting comments regarding the 

payment system for home infusion 

therapy services beginning in CY 2021. 

a. Relationship to DME 

As mentioned previously, Medicare 

Part B covers certain infusion pumps 

and supplies (including certain home 

infusion drugs) that are necessary for 

the effective use of the infusion pump, 

through the DME benefit. To be covered 

under the Part B DME benefit, the drug 

must be reasonable and necessary for 

the treatment of illness or injury or to 

improve the function of a malformed 

body member, and the drug must be 

necessary for the effective use of the 

DME. However, there is no separate 

Medicare Part B DME payment for 

professional services associated with the 

administration of home infusion drugs, 

including nursing services, or for 

training and education, monitoring, and 

remote monitoring services. Therefore, 

we consider the home infusion therapy 

benefit principally to be a separate 

payment in addition to the existing 

payment made under the DME benefit, 

thus explicitly and separately paying for 

the home infusion therapy services. 

b. Definition of Infusion Drug 

Administration Calendar Day 

Section 1834(u)(7)(E)(i) of the Act 

applies the same definition of ‘‘infusion 

drug administration calendar day’’ for 

both the home infusion therapy 

temporary transitional payment and the 

home infusion therapy services benefit. 

We anticipate retaining the definition of 

infusion drug administration calendar 

day, as proposed in section IV.C.2. of 

this proposed rule for the full 

implementation of the home infusion 

therapy services benefit. This means 

that payment for an infusion drug 

administration calendar day is for the 

day on which home infusion therapy 

services are furnished by skilled 

professionals in the individual’s home 

on the day of infusion drug 

administration. An infusion drug 

administration visit that begins in one 

calendar day and spans into the next 

calendar day would be considered one 

visit using the date the visit ended as 

the service date. The skilled services 

provided on such day must be so 

inherently complex that they can only 

be safely and effectively performed by, 

or under the supervision of, professional 

or technical personnel. We are soliciting 

comments on the definition as 

discussed in section IV.C.2. of this 

proposed rule. 

c. Payment Basis, Limitation on 

Payment, Required and Discretionary 

Adjustments, and Billing Procedures 

Section 1834(u)(1)(A) of the Act 

requires the establishment of a unit of 

single payment for each infusion drug 

administration calendar day. Section 

1834(u)(1)(A)(iii) of the Act limits the 

unit of single payment by requiring that 

it must not exceed the amount 

determined under the fee schedule 

under section 1848 of the Act for 

infusion therapy services furnished in a 

calendar day if furnished in a 

physician’s office, and the single 

payment must not reflect more than five 

hours for a particular therapy in a 

calendar day. Additionally, section 

1834(u)(1) of the Act includes 

provisions for payment adjustments to 


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the unit of single payment for home 

infusion therapy. Section 1834(u)(1)(B) 

of the Act requires adjustments to reflect 

factors such as patient acuity and 

complexity of drug administration, and 

a geographic wage index and other costs 

that may vary by region. While the three 

payment categories used for the 

temporary transitional payment in CYs 

2019 and 2020 reflect the therapy type 

and complexity of the drug 

administration under the Physician Fee 

Schedule, we are soliciting comments 

on other ways to account for therapy 

type and complexity of administration, 

as well as ways to capture patient 

acuity. 

Section 1834(u)(1)(B)(i) of the Act 

requires that the single payment amount 

be adjusted by a geographic wage index; 

therefore, we are considering using the 

Geographic Practice Cost Indices 

(GPCIs) to account for regional 

variations in wages and adjust the 

payment for the professional services. A 

GPCI has been established for every 

Medicare payment locality for each of 

the three components of a procedure’s 

relative value unit (RVU) (for example, 

the RVUs for work, practice expense, 

and malpractice). The GPCIs are applied 

in the calculation of a fee schedule 

payment amount by multiplying the 

RVU for each component times the GPCI 

for that component.99 Finally, section 

1834(u)(1)(C) of the Act allows for 

discretionary adjustments which may 

include outlier situations and other 

factors as deemed appropriate by the 

Secretary, and are required to be made 

in a budget neutral manner. We request 

feedback on situations that may incur an 

outlier payment and potential designs 

for an outlier payment calculation. 

For CY 2021 and subsequent years, 

although not required by law, the Part 

B qualified home infusion therapy 

supplier could potentially submit a 

claim for home infusion therapy 

services on a Part B practitioner claim 

and processed through the A/B MACs, 

rather than the DME MACs. We are 

soliciting comment on whether 

submitting a Part B practitioner claim 

processed through the A/B MACs is 

reasonable given that other types of 

suppliers and providers of services 

(such as physicians and HHAs), and not 

just DME suppliers, can meet the 

requirements under section 1861(iii) of 

the Act, such as accreditation, to 

provide home infusion therapy services. 

In addition, when Part B practitioner 

claims are processed through the A/B 

MACs a mechanism is already in place 

for the geographic wage adjustment, as 

required for the home infusion therapy 

payment system, and we are considering 

the use of GPCI as described previously. 

In order to bill for the home infusion 

therapy services, beginning on January 

1, 2021, a qualified home infusion 

therapy supplier will need to enroll in 

Medicare as a Part B Home Infusion 

Therapy supplier. Additionally, in order 

to furnish DME equipment and 

supplies, that same qualified home 

infusion therapy supplier must also be 

enrolled as a DME supplier since the 

home infusion therapy services are 

required to be for the furnishing of DME 

infusion drugs through a DME infusion 

pump. In other words, both enrollments 

would be necessary for the same 

supplier to bill for home infusion 

therapy services and the DME 

equipment and supplies. Therefore, in 

order to be paid for all elements of home 

infusion therapy, two claims would 

need to be submitted: (1) The first claim 

for the DME drug, equipment, and 

supplies on the 837P/CMS–1500 

professional and supplier claims form 

submitted to the DME MAC; and (2) a 

second claim for the professional 

services on the 837P/CMS–1500 

professional and supplier claims form 

submitted to the A/B MAC. 

We invite comments on the unit of 

single payment, limitations on payment, 

and required and discretionary 

adjustments. We are also soliciting 

comments on whether it is reasonable to 

require two separate claims submissions 

to account for all components of home 

infusion therapy using the 837P/CMS– 

1500 professional and supplier claims 

form, and submitting claims to both the 

DME MACs and the A/B MACs for 

processing. Finally, we are soliciting 

any additional suggestions as to how 

qualified home infusion therapy 

suppliers should bill and be paid for 

services under the home infusion 

therapy benefit. 

d. Definition of Professional/Nursing 

Services and Monitoring Related to the 

Administration of Home Infusion Drugs 

In accordance with section 

1861(iii)(2) of the Act, items and 

services covered under the home 

infusion therapy benefit are as follows: 

• Professional services, including 

nursing services, furnished in 

accordance with the plan. 

• Training and education (not 

otherwise paid for as DME), 

• Remote monitoring, and monitoring 

services for the provision of home 

infusion drugs furnished by a qualified 

home infusion therapy supplier. 

Section 1861(n) of the Act defines 

DME as equipment used in the patient’s 

home. Furthermore, the regulations at 

42 CFR 424.57(c)(12) state that the DME 

supplier ‘‘must document that it or 

another qualified party has at an 

appropriate time, provided beneficiaries 

with necessary information and 

instructions on how to use Medicarecovered items safely and effectively.’’ 

As the medications in the DME external 

infusion pump LCDs are considered 

supplies to the external infusion pump, 

and have been identified as drugs and 

biologicals that can be self-infused in 

the home, ongoing nursing supervision 

is not required once the patient and/or 

caregiver has been sufficiently taught to 

safely manage the pump. We recognize 

that the DME supplier standards require 

a DME supplier to document that it or 

another qualified party has at an 

appropriate time provided beneficiaries 

with necessary information and 

instructions on how to use Medicarecovered items safely and effectively (42 

CFR 424.57(c)(12)). Therefore, the inhome nursing services under the home 

infusion therapy benefit would include 

a limited amount of teaching and 

training on the provision of home 

infusion drugs that is not already 

covered under the DME benefit in 

accordance. 

In determining the reasonable and 

necessary number of infusion therapy 

visits, the home infusion therapy 

supplier must consider whether the 

training and education provided 

constitutes reinforcement of teaching 

provided previously in an institutional 

setting or in the home, or whether it 

represents initial instruction. Where the 

teaching represents initial instruction, 

the supplier should consider patient 

acuity, including the unique abilities of 

the patient, and complexity of the 

infusion. Where the teaching constitutes 

reinforcement, the supplier should 

evaluate the patient’s retained 

knowledge and anticipated learning 

progress to determine the appropriate 

number of visits. Re-teaching or 

retraining for an appropriate period may 

be considered reasonable and necessary 

where there is a change in the infusion 

protocol or the patient’s condition that 

requires re-teaching, or where the 

patient, family, or caregiver is not 

properly carrying out the task. The 

medical record should document the 

anticipated number of training and 

education visits required, patient/ 

caregiver response to training, and if 

necessary, the reason that the reteaching or retraining is required. Where 

it becomes apparent after a reasonable 

period of time that the patient/caregiver 

is not able to be trained, or if the 

patient/caregiver has been taught to 

safely and effectively use the infusion 


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External+Infusion+Pumps+LCD. 

101 Gabriel J (2013) Venous access devices part 2: 

preventing and managing complications of CVADs. 

Nursing Times; 109: 40, 20–23. 

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DMEPOSAccreditationStandardsCMB.pdf. 

pump in the home, then further 

teaching and training would cease to be 

reasonable and necessary. In accordance 

with section 1861(iii)(1)(B), an 

individual must be under a plan of care 

established by a physician, prescribing 

the type, amount, and duration of 

infusion therapy services that are to be 

furnished in coordination with the 

furnishing of home infusion drugs 

under Part B. These home infusion 

drugs, defined under section 

1861(iii)(3)(C) of the Act, must be 

administered intravenously, or 

subcutaneously for an administration 

period of 15 minutes or more through a 

pump that is an item of DME in order 

for home infusion therapy services to be 

reasonable and necessary for the 

treatment of the illness or injury. In 

order to satisfy the definition of DME, 

an item must be appropriate for use in 

the home. In this case, in order to be 

considered appropriate for use in the 

home, the patient must be able to safely 

and effectively operate the infusion 

pump. Therefore, if a patient is unable 

to safely and effectively operate the 

infusion pump in the home, then the 

patient would not be eligible for the 

home infusion therapy benefit. 

It is important to reiterate that the 

professional services covered under this 

benefit are not intended to provide ongoing nursing supervision throughout 

each infusion. If applicable, the reason 

why a training was unsuccessful should 

be documented in the record. We invite 

comments regarding what constitutes a 

reasonable and necessary amount of 

training and education for the provision 

of home infusion drugs. We outline in 

this section additional, more detailed 

information on the professional and 

nursing services that would be covered, 

as well as remote monitoring services 

for the provision of home infusion 

drugs, as defined in 1861(iii)(3)(C) of the 

Act, relative to the therapy types 

currently included in the DME external 

infusion pump LCD.100

(1) Central Vascular Access Device 

Maintenance 

As many of the drugs and biologicals 

included in the DME external infusion 

pump LCD are given continuously, 

given on a long-term basis, or are 

vesicants or irritants that should not be 

given peripherally, many beneficiaries 

would likely have central vascular 

access devices (CVAD), such as 

peripherally inserted central catheters 

(PICC), central lines, or ports requiring 

training and education regarding 

maintenance and hygiene, and site care 

and dressing changes. The qualified 

home infusion therapy supplier would 

be responsible for educating the patient 

on properly disinfecting access points 

and connectors, what to do in the event 

of a dislodgement or occlusion, and 

signs/symptoms of infection. This also 

includes teaching the patient about 

flushing the CVAD after the infusion to 

ensure all of the medication has been 

flushed through the tubing and catheter, 

and locking the catheter to prevent 

blood from backing into the catheter and 

clotting. Education regarding specific 

techniques and solutions (saline or 

heparin) may be given to minimize 

catheter occlusion.101

(2) Medication Education and Disease 

Management 

The qualified home infusion therapy 

supplier would be responsible for 

ensuring that the patient has been 

properly educated about his/her disease, 

medication therapy, and lifestyle 

changes. This could include selfmonitoring instruction (for example, 

nutrition, temperature, blood pressure, 

heart rate, daily weight, abdominal girth 

measurement, edema, urine output) and 

identification of complications or 

problems necessitating a call to the 

infusion nurse/pharmacist, or 

emergency protocols if they arise. The 

qualified home infusion therapy 

supplier would ensure proper 

understanding of the medication 

therapy including: Drug; route of 

administration; prescription (dosage, 

how often to administer, and duration of 

therapy); side effects and interactions 

with other medications; adverse 

reactions to therapy; goals of therapy; 

and indications of progress. Lifestyle 

education regarding behavior and food/ 

fluid modifications/restrictions, 

symptom management, and infection 

control are also important aspects of this 

education. As some drugs covered 

under the DME benefit involve 

extensive lifestyle changes and dietary 

restrictions, training and education as 

included in the home infusion therapy 

benefit could entail any ancillary 

services such as visits with social 

workers or dieticians as needed, and 

documented in the medical record. For 

patients on continuous, potentially life 

long IV therapy, the nurse, social 

worker, or dietician would assess the 

need for further training and education 

regarding the concept of long-term drug 

infusion and address aspects of life-style 

changes and realistic expectations for 

life with an infusion pump. 

(3) Patient Evaluation and Assessment 

Comprehensive patient assessment is 

imperative when providing home 

infusion therapy in order to ensure the 

accuracy of the medication 

administration and safety of the patient, 

and to determine whether changes in 

the home infusion therapy plan of care 

are necessary. The qualified home 

infusion therapy supplier would 

evaluate patient history, current 

physical and mental status, including 

patient response to therapy, any adverse 

effects or infusion complications, lab 

reports, cognitive and psychosocial 

status, family/care partner support, 

prescribed treatment, concurrent oral 

prescriptions, and over-the-counter 

medications. This includes obtaining 

any necessary blood-work and vital 

signs. 

(4) Medication Administration 

As the DME supplier is responsible, 

under the DME benefit,102 for training 

the patient and caregiver on pump 

operation, maintenance, and 

troubleshooting; the qualified home 

infusion therapy supplier would be 

responsible for all other aspects of 

medication administration, including 

inspection of medications, containers, 

supplies prior to use; proper drug 

storage and disposal; household 

precautions for chemotherapy drugs 

including spills, handling body wastes, 

and physical contact precautions; hand 

hygiene and aseptic technique; pre/post 

medication/hydration administration; 

and medication preparation. 

(5) Remote Monitoring and Monitoring 

Services 

Section 1861(iii)(3)(D)(i)(II) of the Act 

requires that the qualified home 

infusion therapy supplier ‘‘ensures the 

safe and effective provision and 

administration of home infusion therapy 

on a 7-day-a-week, 24-hour-a-day 

basis.’’ Therefore, the qualified home 

infusion therapy supplier would closely 

monitor lab values, patient response to 

therapy, and assess compliance. Direct 

communication and coordination with 

the patient, caregivers, applicable 

providers, and pharmacist regarding 

changes in the patient’s condition 

should be on-going so that any 

adjustment to treatment is made as 

needed and in a timely fashion. 

Monitoring services, as indicated on 

the plan of care, would dictate either the 


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preauthorization/. 

need for daily monitoring of indicated 

vitals (through remote monitoring) or 

specify the interval for in-person 

evaluation and assessment of the 

patient. The use of remote monitoring 

services for those patients receiving 

home infusion therapy would likely be 

limited to patients receiving continuous 

infusion medications as identified in the 

plan of care. These patients are 

considered high risk patients and 

require daily monitoring, but generally 

do not need to be seen by a practitioner 

daily. This can be achieved, for 

example, through the use of a remote 

monitoring service that includes 

monitoring equipment through which 

the patient electronically submits selfobtained vital signs, such as weight, 

blood pressure, and heart rate. In this 

example, an off-site monitoring service 

would communicate any abnormal 

results to the home infusion therapy 

supplier for analysis and consultation 

with the provider overseeing the 

patient’s care (that is, physician, nurse 

practitioner, or physician assistant) 

regarding potential treatment plan 

changes. 

We invite comments on any 

additional interpretations of 

professional, nursing, training and 

education, and monitoring services that 

may be considered under the scope of 

the home infusion therapy benefit. We 

also specifically welcome comments on 

the use of remote monitoring under the 

home infusion therapy benefit. 

e. The Role of Prior Authorization 

Under the Home Infusion Therapy 

Benefit 

Section 1834(u)(4) of the Act states 

that the Secretary may apply prior 

authorization for home infusion 

services. Generally, prior authorization 

requires that a decision by a health 

insurer or plan be rendered to confirm 

that a health care service, treatment 

plan, prescription drug or durable 

medical equipment is medically 

necessary.103 Prior authorization helps 

to ensure that a service, such as home 

infusion therapy, is being provided 

appropriately. Private health plans 

generally require prior authorization 

before home infusion therapy can begin. 

We would maintain the discretion to 

decide if certain drugs or frequency in 

visits require prior authorization before 

therapy can be covered. The emphasis 

would be on the appropriateness of the 

drug and the necessity of associated 

professional services and not the site of 

care. We are soliciting comments as to 

whether and how prior authorization 

could potentially be utilized for home 

infusion therapy. 

f. Home Infusion Therapy and the 

Relationship to/Interaction With Home 

Health 

A beneficiary does not have to be 

considered confined to the home (that 

is, homebound) in order to be eligible 

for the home infusion therapy benefit. 

However, homebound beneficiaries 

requiring home health services also may 

be eligible for the home infusion 

therapy benefit. Therefore, there may be 

circumstances when a patient may 

utilize both the home health benefit and 

the home infusion therapy benefit 

concurrently. 

HHAs are required to furnish 

necessary DME and coordinate home 

infusion services when a patient is 

under a home health plan of care. In 

accordance with the Home Health 

Conditions of Participation at 42 CFR 

484.60, the HHA must assure 

communication with all physicians 

involved in the plan of care, as well as 

integrate orders and services provided 

by all physicians and disciplines. In 

order to qualify for the Medicare home 

health benefit, the beneficiary must— 

• Be confined to the home; 

• Be under the care of a physician; 

• Receive services under a plan of 

care established and periodically 

reviewed by a physician; 

• Be in need of skilled nursing care 

on an intermittent basis or physical 

therapy or speech-language pathology, 

or have a continuing need for 

occupational therapy; and 

• Have had a face-to-face encounter 

related to the primary reason for home 

health care with an allowed provider 

type and within the required timeframe. 

If a patient meets the requirements 

listed previously and a home health 

visit is furnished that is unrelated to 

home infusion therapy, then payment 

for the home health visit would be 

covered by the HH PPS payment and 

billed on the home health claim. When 

the HHA providing services under the 

Medicare home health benefit is also the 

same entity furnishing services as the 

qualified home infusion therapy 

supplier, and a home visit is exclusively 

for the purpose of furnishing items and 

services related to home infusion 

therapy, the HHA would submit a claim 

for payment as a home infusion therapy 

supplier and receive payment under the 

home infusion therapy benefit. If the 

home visit includes the provision of 

other home health services in addition 

to, and separate from, items and services 

related to the home infusion therapy, 

the HHA would submit both a home 

health claim and a home infusion 

therapy claim, but must separate the 

time spent performing services covered 

under the HH PPS from the time spent 

performing services covered under the 

home infusion therapy benefit. We 

anticipate this would be similar to the 

approach for furnishing negative 

pressure wound therapy using a 

disposable device as described in the 

regulations at 42 CFR 484.205(b). 

We are soliciting feedback on the 

relationship between the Medicare 

home health benefit and the home 

infusion therapy benefit, including how 

payment would be made for a 

beneficiary who meets eligibility 

requirements for home health services 

and home infusion therapy services. 

VII. Changes to the Accreditation 

Requirements for Certain MedicareCertified Providers and Suppliers 

A. Background 

To participate in the Medicare 

program, Medicare-certified providers 

and suppliers of health care services, 

must be substantially in compliance 

with specified statutory requirements of 

the Act, as well as any additional 

regulatory requirements related to the 

health and safety of patients specified 

by the Secretary of the Department of 

Health and Human Services (HHS). 

Medicare certified providers and 

suppliers are enrolled in the Medicare 

program by entering into an agreement 

with Medicare. They include hospitals, 

skilled nursing facilities, home health 

agencies, hospice programs, rural health 

clinics, critical access hospitals, 

comprehensive outpatient rehabilitation 

facilities, laboratories, clinics, 

rehabilitation agencies, public health 

agencies, and ambulatory surgical 

centers. These health and safety 

requirements are generally called 

conditions of participation (CoPs) for 

most providers, requirements for skilled 

nursing facilities (SNFs), conditions for 

coverage (CfCs) for ambulatory surgical 

centers (ASCs) and other suppliers, and 

conditions for certification for rural 

health clinics (RHCs). A Medicarecertified provider or supplier that does 

not substantially comply with the 

applicable health and safety 

requirements risks having its 

participation in the Medicare program 

terminated. 

In accordance with section 1864 of 

the Act, state health departments or 

similar agencies, under an agreement 

with CMS, survey health care providers 

and suppliers to ascertain compliance 

with the applicable CoPs, CfCs, 

conditions of certification, or 

requirements, and certify their findings 

to us. Based on these State Survey 


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Agency (SA) certifications, we 

determine whether the provider or 

supplier qualifies, or continues to 

qualify, for participation in the 

Medicare program. 

Section 1865(a) of the Act allows most 

health care facilities to demonstrate 

compliance with Medicare CoPs, 

requirements, CfCs, or conditions for 

certification through accreditation by a 

CMS-approved program of a national 

accreditation body. If an AO is 

recognized by the Secretary as having 

standards for accreditation that meet or 

exceed Medicare requirements, any 

provider or supplier accredited by the 

AO’s CMS-approved accreditation 

program may be deemed by us to meet 

the Medicare conditions or 

requirements. 

We are responsible for the review, 

approval and subsequent oversight of 

national AOs’ Medicare accreditation 

programs, and for ensuring providers or 

suppliers accredited by the AO meet the 

quality and patient safety standards 

required by the Medicare CoPs, 

requirements, CfCs, and conditions for 

certification. Any national AO seeking 

approval of an accreditation program in 

accordance with section 1865(a) of the 

Act must apply for and be approved by 

CMS for a period not to exceed six 

years. 

The AO must reapply for renewed 

CMS approval of an accreditation 

program before the date its approval 

period expires. This allows providers or 

suppliers accredited under the program 

to continue to be deemed to be in 

compliance with the applicable 

Medicare CoPs, requirements, CfCs, and 

conditions for certification. Regulations 

implementing these provisions are 

found at 42 CFR 488.1 through 488.9. 

We believe that it is necessary to 

revise the regulations for Medicarecertified providers and providers to add 

two new requirements for the AOs that 

accredit certified providers and 

providers. First, we are proposing at 

§ 488.5 to require AOs for Medicarecertified providers and suppliers to 

include a written statement in their 

application which states that if a fully 

accredited and deemed facility in good 

standing provides written notification 

that they wish to voluntarily withdraw 

from the AO’s CMS-approved 

accreditation program, the AO must 

continue the facility’s current 

accreditation until the effective date of 

withdrawal identified by the facility or 

the expiration date of the term of 

accreditation, whichever comes first. 

We are also proposing to modify the AO 

oversight regulations at § 488.5 by 

adding new requirements for training 

for AO surveyors. 

B. Proposed Changes to Certain 

Requirements for Medicare-Certified 

Providers and Suppliers at Part 488 

1. Continuation of Term of 

Accreditation When a MedicareCertified Provider or Supplier Decides 

to Voluntarily Terminate the Services of 

an Accrediting Organization (§ 488.5) 

We propose to add a new regulation 

at § 488.5(a)(17)(iii), which would 

require that, with an initial or renewal 

application for CMS-approval of a 

Medicare certified provider or supplier 

accreditation program, an AO must 

include a written statement agreeing 

that when a fully accredited, deemed 

provider or supplier in good standing 

notifies its AO that it wishes to 

voluntarily withdraw from the AO’s 

accreditation program, the AO would 

honor the provider’s or supplier’s 

current term of accreditation until the 

effective date of withdrawal identified 

by the facility, or the expiration date of 

the term of accreditation, whichever 

comes first. We make this proposal 

because we have received numerous 

complaints from accredited and deemed 

facilities in good standing with their 

current AO stating that once they 

provide notification to the AO of their 

intent to voluntary withdrawal their 

accreditation from that AO, the AO 

frequently terminates their accreditation 

immediately without regard to their 

current accreditation status, up to date 

payment of fees, contract status, or the 

facility’s requested effective date of 

withdrawal. Accreditation is voluntary 

for Medicare certified providers and 

suppliers that participate in Medicare. It 

is not required for participation in 

Medicare. Therefore, we do not believe 

it is reasonable for AOs to penalize 

facilities because they choose to 

terminate the services of an AO. 

Medicare certified providers and 

suppliers may freely choose to 

demonstrate compliance with the 

Medicare conditions.by receiving 

surveys from any CMS-approved AO of 

their choice, or the SA. 

2. Training Requirements for 

Accrediting Organization Surveyors 

(§ 488.5(a)(7)) 

We are proposing to add a new 

requirement at § 488.5(a)(7) which 

imposes a new training requirement for 

surveyors of AO that accredit Medicare 

certified provider and supplier types by 

amending the provision at § 488.5(a)(7). 

We are proposing that all AO surveyors 

be required to complete the relevant 

program-specific CMS online trainings 

initially, and thereafter, consistent with 

requirements established by CMS for 

state surveyors. CMS provides a wide 

variety of comprehensive trainings 

through an on-demand integrated 

surveyor training website. These online 

trainings are available and can be 

accessed by state and federal surveyors 

and the public, free of charge, 24 hours 

a day, 365 days a year. These online 

trainings are currently publically 

available for the SA surveyors. 

As part of our oversight of the AOs 

performance, CMS has contracted with 

the SAs to perform validation surveys 

on a sample of providers and suppliers 

(such as hospitals, critical access 

hospital, ambulatory surgical centers, 

and home health agencies) accredited by 

the AOs that accredit Medicare certified 

providers and suppliers. Validation 

surveys must be performed by the SA 

within 60 days of the survey performed 

by the AO. As a validation survey is 

performed within 60 days of the AO 

survey, we believe that the conditions at 

the hospital or other facility being 

surveyed would be similar at the time 

of the validation survey. 

The purpose of a validation survey is 

to compare the survey findings of the 

AO to the survey findings of the SA to 

see if there are any disparities. The 

amount of disparities found in the AO’s 

survey is called the ‘‘disparity rate’’ and 

is tracked by CMS as an indication of 

the quality of the surveys performed by 

the AO. 

CMS has determined that many of the 

AOs’ disparity rates have been 

consistently high. This means that the 

AOs have consistently failed to find the 

same condition level deficiencies in the 

care provided by the hospital or other 

providers surveyed that were found by 

the SA during the validation survey. 

We believe that the disparity in 

findings made by the AO surveyors and 

those of the SA surveyors can largely be 

attributed the difference in the training 

and education provided to the AO 

surveyors. Each AO is responsible for 

providing training and education to 

their surveyors. The surveyor training 

and education provided varies from AO 

to AO and is not consistent. CMS 

provides comprehensive online training 

to the SA surveyor staff on the CMS 

Surveyor Training website 104 which are 

specific to each type of provider of 

supplier type to be surveyed. 

It is our belief that the AO’s disparity 

rate would be decreased if all surveyors 

took the same training. We believe 

completion of the same surveyor 

training by both SA and AO surveyors 

would increase the consistency between 

the results of the surveys performed by 

the SAs and AOs and have a positive 

impact on the historically high disparity 


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105These statistics can be accessed at: 

https://dashboard.healthit.gov/quickstats/pages/ 

FIG-Hospital-EHR-Adoption.php. 

106The draft version of the trusted Exchange 

Framework may be accessed at: https://

beta.healthit.gov/topic/interoperability/trustedexchange-framework-and-common-agreement. 

rate. Therefore we are proposing that all 

AO surveyors be required to take the 

CMS online surveyor training offered on 

the CMS website. We would require 

each AO to provide CMS with 

documentation which provides proof 

that each of their surveyors has 

completed the CMS online surveyor 

training. If the AO fails to provide this 

documentation, CMS could place the 

AO on an accreditation program review 

pursuant to § 488.8(c). 

VIII. Requests for Information 

This section addresses two requests 

for information (RFI). Upon reviewing 

the RFIs, respondents are encouraged to 

provide complete but concise responses. 

These RFIs are issued solely for 

information and planning purposes; 

neither RFI constitutes a Request for 

Proposal (RFP), application, proposal 

abstract, or quotation. The RFIs do not 

commit the U.S. Government to contract 

for any supplies or services or make a 

grant award. Further, CMS is not 

seeking proposals through these RFIs 

and will not accept unsolicited 

proposals. Responders are advised that 

the U.S. Government will not pay for 

any information or administrative costs 

incurred in response to these RFIs; all 

costs associated with responding to 

these RFIs will be solely at the 

interested party’s expense. Failing to 

respond to either RFI will not preclude 

participation in any future procurement, 

if conducted. It is the responsibility of 

the potential responders to monitor each 

RFI announcement for additional 

information pertaining to the request. 

Please note that CMS will not respond 

to questions about the policy issues 

raised in these RFIs. CMS may or may 

not choose to contact individual 

responders. Such communications 

would only serve to further clarify 

written responses. Contractor support 

personnel may be used to review RFI 

responses. Responses to these RFIs are 

not offers and cannot be accepted by the 

U.S. Government to form a binding 

contract or issue a grant. Information 

obtained as a result of these RFIs may 

be used by the U.S. Government for 

program planning on a non-attribution 

basis. Respondents should not include 

any information that might be 

considered proprietary or confidential. 

This RFI should not be construed as a 

commitment or authorization to incur 

cost for which reimbursement would be 

required or sought. All submissions 

become U.S. Government property and 

will not be returned. CMS may 

publically post the comments received, 

or a summary thereof. 

A. Request for Information on 

Promoting Interoperability and 

Electronic Healthcare Information 

Exchange Through Possible Revisions to 

the CMS Patient Health and Safety 

Requirements for Hospitals and Other 

Medicare- and Medicaid-Participating 

Providers and Suppliers 

Currently, Medicare- and Medicaidparticipating providers and suppliers 

are at varying stages of adoption of 

health information technology (health 

IT). Many hospitals have adopted 

electronic health records (EHRs), and 

CMS has provided incentive payments 

to eligible hospitals, critical access 

hospitals (CAHs), and eligible 

professionals who have demonstrated 

meaningful use of certified EHR 

technology (CEHRT) under the Medicare 

EHR Incentive Program. As of 2015, 96 

percent of Medicare- and Medicaidparticipating non-Federal acute care 

hospitals had adopted certified EHRs 

with the capability to electronically 

export a summary of clinical care.105

While both adoption of EHRs and 

electronic exchange of information have 

grown substantially among hospitals, 

significant obstacles to exchanging 

electronic health information across the 

continuum of care persist. Routine 

electronic transfer of information postdischarge has not been achieved by 

providers and suppliers in many 

localities and regions throughout the 

Nation. 

CMS is firmly committed to the use of 

certified health IT and interoperable 

EHR systems for electronic healthcare 

information exchange to effectively help 

hospitals and other Medicare- and 

Medicaid-participating providers and 

suppliers improve internal care delivery 

practices, support the exchange of 

important information across care team 

members during transitions of care, and 

enable reporting of electronically 

specified clinical quality measures 

(eCQMs). The Office of the National 

Coordinator for Health Information 

Technology (ONC) acts as the principal 

Federal entity charged with 

coordination of nationwide efforts to 

implement and use health information 

technology and the electronic exchange 

of health information on behalf of the 

Department of Health and Human 

Services. 

In 2015, ONC finalized the 2015 

Edition health IT certification criteria 

(2015 Edition), the most recent criteria 

for health IT to be certified to under the 

ONC Health IT Certification Program. 

The 2015 Edition facilitates greater 

interoperability for several clinical 

health information purposes and 

enables health information exchange 

through new and enhanced certification 

criteria, standards, and implementation 

specifications. CMS requires eligible 

hospitals and CAHs in the Medicare and 

Medicaid EHR Incentive Programs and 

eligible clinicians in the Quality 

Payment Program (QPP) to use EHR 

technology certified to the 2015 Edition 

beginning in CY 2019. 

In addition, several important 

initiatives will be implemented over the 

next several years to provide hospitals 

and other participating providers and 

suppliers with access to robust 

infrastructure that will enable routine 

electronic exchange of health 

information. Section 4003 of the 21st 

Century Cures Act (Pub. L. 114–255), 

enacted in 2016, and amending section 

3000 of the Public Health Service Act 

(42 U.S.C. 300jj), requires HHS to take 

steps to advance the electronic exchange 

of health information and 

interoperability for participating 

providers and suppliers in various 

settings across the care continuum. 

Specifically, Congress directed that 

ONC ‘‘. . . for the purpose of ensuring 

full network-to-network exchange of 

health information, convene publicprivate and public-public partnerships 

to build consensus and develop or 

support a trusted exchange framework, 

including a common agreement among 

health information networks 

nationally.’’ In January 2018, ONC 

released a draft version of its proposal 

for the Trusted Exchange Framework 

and Common Agreement,106 which 

outlines principles and minimum terms 

and conditions for trusted exchange to 

enable interoperability across disparate 

health information networks (HINs). 

The Trusted Exchange Framework (TEF) 

is focused on achieving the following 

four important outcomes in the longterm: 

• Professional care providers, who 

deliver care across the continuum, can 

access health information about their 

patients, regardless of where the patient 

received care. 

• Patients can find all of their health 

information from across the care 

continuum, even if they do not 

remember the name of the professional 

care provider they saw. 

• Professional care providers and 

health systems, as well as public and 

private health care organizations and 

public and private payer organizations 


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accountable for managing benefits and 

the health of populations, can receive 

necessary and appropriate information 

on groups of individuals without having 

to access one record at a time, allowing 

them to analyze population health 

trends, outcomes, and costs; identify atrisk populations; and track progress on 

quality improvement initiatives. 

• The health IT community has open 

and accessible application programming 

interfaces (APIs) to encourage 

entrepreneurial, user-focused 

innovation that will make health 

information more accessible and 

improve EHR usability. 

ONC will revise the draft TEF based 

on public comment and ultimately 

release a final version of the TEF that 

will subsequently be available for 

adoption by HINs and their participants 

seeking to participate in nationwide 

health information exchange. The goal 

for stakeholders that participate in, or 

serve as, a HIN is to ensure that 

participants will have the ability to 

seamlessly share and receive a core set 

of data from other network participants 

in accordance with a set of permitted 

purposes and applicable privacy and 

security requirements. Broad adoption 

of this framework and its associated 

exchange standards is intended to both 

achieve the outcomes described above 

while creating an environment more 

conducive to innovation. 

In light of the widespread adoption of 

EHRs along with the increasing 

availability of health information 

exchange infrastructure predominantly 

among hospitals, we are interested in 

hearing from stakeholders on how we 

could use the CMS health and safety 

standards that are required for providers 

and suppliers participating in the 

Medicare and Medicaid programs (that 

is, the Conditions of Participation 

(CoPs), Conditions for Coverage (CfCs), 

and Requirements for Participation 

(RfPs) for Long-Term Care (LTC) 

Facilities) to further advance electronic 

exchange of information that supports 

safe, effective transitions of care 

between hospitals and community 

providers. Specifically, CMS might 

consider revisions to the current CMS 

CoPs for hospitals, such as: Requiring 

that hospitals transferring medically 

necessary information to another facility 

upon a patient transfer or discharge do 

so electronically; requiring that 

hospitals electronically send required 

discharge information to a community 

provider via electronic means if possible 

and if a community provider can be 

identified; and requiring that hospitals 

make certain information available to 

patients or a specified third-party 

application (for example, required 

discharge instructions) via electronic 

means if requested. 

On November 3, 2015, we published 

a proposed rule (80 FR 68126) to 

implement the provisions of the 

Improving Medicare Post-Acute Care 

Transformation Act of 2014 (the 

IMPACT Act) (Pub. L. 113–185) and to 

revise the discharge planning CoP 

requirements that hospitals (including 

short-term acute care hospitals, longterm care hospitals (LTCHs), 

rehabilitation hospitals, psychiatric 

hospitals, children’s hospitals, and 

cancer hospitals), critical access 

hospitals (CAHs), and home health 

agencies (HHAs) would need to meet in 

order to participate in the Medicare and 

Medicaid programs. This proposed rule 

has not been finalized yet. However, 

several of the proposed requirements 

directly address the issue of 

communication between providers and 

between providers and patients, as well 

as the issue of interoperability: 

• Hospitals and CAHs would be 

required to transfer certain necessary 

medical information and a copy of the 

discharge instructions and discharge 

summary to the patient’s practitioner, if 

the practitioner is known and has been 

clearly identified; 

• Hospitals and CAHs would be 

required to send certain necessary 

medical information to the receiving 

facility/post-acute care providers, at the 

time of discharge; and 

• Hospitals, CAHs, and HHAs would 

need to comply with the IMPACT Act 

requirements that would require 

hospitals, CAHs, and certain post-acute 

care providers to use data on quality 

measures and data on resource use 

measures to assist patients during the 

discharge planning process, while 

taking into account the patient’s goals of 

care and treatment preferences. 

We published another proposed rule 

(81 FR 39448) on June 16, 2016, that 

updated a number of CoP requirements 

that hospitals and CAHs would need to 

meet in order to participate in the 

Medicare and Medicaid programs. This 

proposed rule has not been finalized 

yet. One of the proposed hospital CoP 

revisions in that rule directly addresses 

the issues of communication between 

providers and patients, patient access to 

their medical records, and 

interoperability. We proposed that 

patients have the right to access their 

medical records, upon an oral or written 

request, in the form and format 

requested by such patients, if it is 

readily producible in such form and 

format (including in an electronic form 

or format when such medical records 

are maintained electronically); or, if not, 

in a readable hard copy form or such 

other form and format as agreed to by 

the facility and the individual, 

including current medical records, 

within a reasonable timeframe. The 

hospital must not frustrate the 

legitimate efforts of individuals to gain 

access to their own medical records and 

must actively seek to meet these 

requests as quickly as its recordkeeping 

system permits. 

We also published a final rule (81 FR 

68688) on October 4, 2016, that revised 

the requirements that LTC facilities 

must meet to participate in the Medicare 

and Medicaid programs. In this rule, we 

made a number of revisions based on 

the importance of effective 

communication between providers 

during transitions of care, such as 

transfers and discharges of residents to 

other facilities or providers, or to home. 

Among these revisions was a 

requirement that the transferring LTC 

facility must provide all necessary 

information to the resident’s receiving 

provider, whether it is an acute care 

hospital, an LTCH, a psychiatric facility, 

another LTC facility, a hospice, a home 

health agency, or another communitybased provider or practitioner (42 CFR 

483.15(c)(2)(iii)). We specified that 

necessary information must include the 

following: 

• Contact information of the 

practitioner responsible for the care of 

the resident; 

• Resident representative information 

including contact information; 

• Advance directive information; 

• Special instructions or precautions 

for ongoing care; 

• The resident’s comprehensive care 

plan goals; and 

• All other necessary information, 

including a copy of the resident’s 

discharge or transfer summary and any 

other documentation to ensure a safe 

and effective transition of care. 

We note that the discharge summary 

mentioned above must include 

reconciliation of the resident’s 

medications, as well as a recapitulation 

of the resident’s stay, a final summary 

of the resident’s status, and the postdischarge plan of care. In addition, in 

the preamble to the rule, we encouraged 

LTC facilities to electronically exchange 

this information if possible and to 

identify opportunities to streamline the 

collection and exchange of resident 

information by using information that 

the facility is already capturing 

electronically. 

Additionally, we specifically invite 

stakeholder feedback on the following 

questions regarding possible new or 

revised CoPs/CfCs/RfPs for 

interoperability and electronic exchange 

of health information: 


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• If CMS were to propose a new CoP/ 

CfC/RfP standard to require electronic 

exchange of medically necessary 

information, would this help to reduce 

information blocking as defined in 

section 4004 of the 21st Century Cures 

Act? 

• Should CMS propose new CoPs/ 

CfCs/RfPs for hospitals and other 

participating providers and suppliers to 

ensure a patient’s or resident’s (or his or 

her caregiver’s or representative’s) right 

and ability to electronically access his 

or her health information without 

undue burden? Would existing portals 

or other electronic means currently in 

use by many hospitals satisfy such a 

requirement regarding patient/resident 

access as well as interoperability? 

• Are new or revised CMS CoPs/CfCs/ 

RfPs for interoperability and electronic 

exchange of health information 

necessary to ensure patients/residents 

and their treating providers routinely 

receive relevant electronic health 

information from hospitals on a timely 

basis or will this be achieved in the next 

few years through existing Medicare and 

Medicaid policies, the implementing 

regulations related to the privacy and 

security standards of the Health 

Insurance Portability and 

Accountability Act of 1996 (HIPAA) 

(Pub. L. 104–91), and implementation of 

relevant policies in the 21st Century 

Cures Act? 

• What would be a reasonable 

implementation timeframe for 

compliance with new or revised CMS 

CoPs/CfCs/RfPs for interoperability and 

electronic exchange of health 

information if CMS were to propose and 

finalize such requirements? Should 

these requirements have delayed 

implementation dates for specific 

participating providers and suppliers, or 

types of participating providers and 

suppliers (for example, participating 

providers and suppliers that are not 

eligible for the Medicare and Medicaid 

EHR Incentive Programs)? 

• Do stakeholders believe that new or 

revised CMS CoPs/CfCs/RfPs for 

interoperability and electronic exchange 

of health information would help 

improve routine electronic transfer of 

health information as well as overall 

patient/resident care and safety? 

• Under new or revised CoPs/CfCs/ 

RfPs, should non-electronic forms of 

sharing medically necessary information 

(for example, printed copies of patient/ 

resident discharge/transfer summaries 

shared directly with the patient/resident 

or with the receiving provider or 

supplier, either directly transferred with 

the patient/resident or by mail or fax to 

the receiving provider or supplier) be 

permitted to continue if the receiving 

provider, supplier, or patient/resident 

cannot receive the information 

electronically? 

• Are there any other operational or 

legal considerations (for example, 

implementing regulations related to the 

HIPAA privacy and security standards), 

obstacles, or barriers that hospitals and 

other providers and suppliers would 

face in implementing changes to meet 

new or revised interoperability and 

health information exchange 

requirements under new or revised CMS 

CoPs/CfCs/RfPs if they are proposed and 

finalized in the future? 

• What types of exceptions, if any, to 

meeting new or revised interoperability 

and health information exchange 

requirements should be allowed under 

new or revised CMS CoPs/CfCs/RfPs if 

they are proposed and finalized in the 

future? Should exceptions under the 

QPP, including CEHRT hardship or 

small practices, be extended to new 

requirements? Would extending such 

exceptions impact the effectiveness of 

these requirements? 

We would also like to directly address 

the issue of communication between 

hospitals (as well as the other providers 

and suppliers across the continuum of 

patient care) and their patients and 

caregivers. MyHealthEData is a 

government-wide initiative aimed at 

breaking down barriers that contribute 

to preventing patients from being able to 

access and control their medical 

records. Privacy and security of patient 

data will be at the center of all CMS 

efforts in this area. CMS must protect 

the confidentiality of patient data, and 

CMS is completely aligned with the 

Department of Veterans Affairs (VA), the 

National Institutes of Health (NIH), 

ONC, and the rest of the Federal 

Government, on this objective. 

While some Medicare beneficiaries 

have had, for quite some time, the 

ability to download their Medicare 

claims information, in pdf or Excel 

formats, through the CMS Blue Button 

platform, the information was provided 

without any context or other 

information that would help 

beneficiaries understand what the data 

were really telling them. For 

beneficiaries, their claims information is 

useless if it is either too hard to obtain 

or, as was the case with the information 

provided through previous versions of 

Blue Button, hard to understand. In an 

effort to fully contribute to the Federal 

Government’s MyHealthEData initiative, 

CMS developed and launched the new 

Blue Button 2.0, which represents a 

major step toward giving patients 

meaningful control of their health 

information in an easy-to-access and 

understandable way. Blue Button 2.0 is 

a developer-friendly, standards-based 

application programming interface (API) 

that enables Medicare beneficiaries to 

connect their claims data to secure 

applications, services, and research 

programs they trust. The possibilities for 

better care through Blue Button 2.0 data 

are exciting, and might include enabling 

the creation of health dashboards for 

Medicare beneficiaries to view their 

health information in a single portal, or 

allowing beneficiaries to share complete 

medication lists with their doctors to 

prevent dangerous drug interactions. 

To fully understand all of these health 

IT interoperability issues, initiatives, 

and innovations through the lens of its 

regulatory authority, CMS invites 

members of the public to submit their 

ideas on how best to accomplish the 

goal of fully interoperable health IT and 

EHR systems for Medicare- and 

Medicaid-participating providers and 

suppliers, as well as how best to further 

contribute to and advance the 

MyHealthEData initiative for patients. 

We are particularly interested in 

identifying fundamental barriers to 

interoperability and health information 

exchange, including those specific 

barriers that prevent patients from being 

able to access and control their medical 

records. We also welcome the public’s 

ideas and innovative thoughts on 

addressing these barriers and ultimately 

removing or reducing them in an 

effective way, specifically through 

revisions to the current CMS CoPs, CfCs, 

and RfPs for hospitals and other 

participating providers and suppliers. 

We have received stakeholder input 

through recent CMS Listening Sessions 

on the need to address health IT 

adoption and interoperability among 

providers that were not eligible for the 

Medicare and Medicaid EHR Incentives 

program, including long-term and postacute care providers, behavioral health 

providers, clinical laboratories and 

social service providers, and we would 

also welcome specific input on how to 

encourage adoption of certified health 

IT and interoperability among these 

types of providers and suppliers as well. 

B. Request for Information on Price 

Transparency: Improving Beneficiary 

Access to Home Health Agency Charge 

Information 

In the FY 2019 IPPS/LTCH PPS 

proposed rule (83 FR 20548 and 20549) 

and the FY 2015 IPPS/LTCH PPS 

proposed and final rules (79 FR 28169 

and 79 FR 50146, respectively), we 

stated that we intend to continue to 

review and post relevant charge data in 

a consumer-friendly way, as we 

previously have done by posting 

hospital and physician charge 


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107See, for example, Medicare Provider 

Utilization and Payment Data, available at: https:// 

www.cms.gov/Research-Statistics-Data-andSystems/Statistics-Trends-and-Reports/MedicareProvider-Charge-Data/index.html. 

information on the CMS website.107 In 

the FY 2019 IPPS/LTCH PPS proposed 

rule, we also continued our discussion 

of the implementation of section 2718(e) 

of the Public Health Service Act, which 

aims to improve the transparency of 

hospital charges. This discussion in the 

FY 2019 IPPS/LTCH PPS proposed rule 

continued a discussion we began in the 

FY 2015 IPPS/LTCH PPS proposed rule 

and final rule (79 FR 28169 and 79 FR 

50146, respectively). In all of these 

rules, we noted that section 2718(e) of 

the Public Health Service Act requires 

that each hospital operating within the 

United States, for each year, establish 

(and update) and make public (in 

accordance with guidelines developed 

by the Secretary) a list of the hospital’s 

standard charges for items and services 

provided by the hospital, including for 

diagnosis-related groups (DRGs) 

established under section 1886(d)(4) of 

the Social Security Act. In the FY 2015 

IPPS/LTCH PPS proposed and final 

rules, we reminded hospitals of their 

obligation to comply with the 

provisions of section 2718(e) of the 

Public Health Service Act and provided 

guidelines for its implementation. We 

stated that hospitals are required to 

either make public a list of their 

standard charges (whether that be the 

chargemaster itself or in another form of 

their choice) or their policies for 

allowing the public to view a list of 

those charges in response to an inquiry. 

In the FY 2019 IPPS/LTCH PPS 

proposed rule, we took one step to 

further improve the public accessibility 

of charge information. Specifically, 

effective January 1, 2019, we are 

updating our guidelines to require 

hospitals to make available a list of their 

current standard charges via the internet 

in a machine readable format and to 

update this information at least 

annually, or more often as appropriate. 

In general, we encourage all providers 

and suppliers to undertake efforts to 

engage in consumer-friendly 

communication of their charges to help 

patients understand what their potential 

financial liability might be for services 

they obtain, and to enable patients to 

compare charges for similar services. 

We encourage providers and suppliers 

to update this information at least 

annually, or more often as appropriate, 

to reflect current charges. 

We are concerned that challenges 

continue to exist for patients due to 

insufficient price transparency. Such 

challenges include patients being 

surprised by out-of-network bills for 

physicians, such as anesthesiologists 

and radiologists, who provide services 

at in-network hospitals and in other 

settings, and patients being surprised by 

facility fees, physician fees for 

emergency department visits, or fees for 

services that are part of the beneficiary’s 

episode of care but that are not 

otherwise included in a hospital’s 

chargemaster (for example, home health 

or physical therapy services that follow 

a hospital stay but are billed separately). 

We also are concerned that, for 

providers and suppliers that maintain a 

list of standard charges, the charge data 

may not be helpful to patients for 

determining what they are likely to pay 

for a particular service or facility 

encounter. In order to promote greater 

price transparency for patients, we are 

considering ways to improve the 

accessibility and usability of current 

charge information. 

We also are considering potential 

actions that would be appropriate to 

further our objective of having providers 

and suppliers undertake efforts to 

engage in consumer-friendly 

communication of their charges to help 

patients understand what their potential 

financial liability might be for services 

they obtain from the provider or 

supplier, and to enable patients to 

compare charges for similar services 

across providers and suppliers, 

including when services could be 

offered in more than one setting. 

Therefore, we are seeking public 

comment from all providers and 

suppliers, including home health 

agencies, on the following: 

• How should we define ‘‘standard 

charges’’ in the home health setting? Is 

there one definition for those settings 

that maintain chargemasters, and 

potentially a different definition for 

those settings that do not maintain 

chargemasters? Should ‘‘standard 

charges’’ be defined to mean: average or 

median rates for the items on a 

chargemaster or other price list or 

charge list; average or median rates for 

groups of items and/or services 

commonly billed together, as 

determined by the HHA based on its 

billing patterns; or the average discount 

off the chargemaster, price list or charge 

list amount across all payers, either for 

each separately enumerated item or for 

groups of services commonly billed 

together? Should ‘‘standard charges’’ be 

defined and reported for both some 

measure of the average contracted rate 

and the chargemaster, price list or 

charge list? Or is the best measure of a 

HHA’s standard charges its 

chargemaster, price list or charge list? 

• What types of information would be 

most beneficial to patients, how can 

HHAs best enable patients to use charge 

and cost information in their decisionmaking, and how can CMS and HHAs 

help third parties create patient-friendly 

interfaces with these data? 

• Should HHAs be required to inform 

patients how much their out-of- pocket 

costs for a service will be before those 

patients are furnished that service? How 

can information on out-of-pocket costs 

be provided to better support patients’ 

choice and decision-making? What 

changes would be needed to support 

greater transparency around patient 

obligations for their out-of-pocket costs? 

How can CMS help beneficiaries to 

better understand how co-pays and coinsurance are applied to each service 

covered by Medicare? What can be done 

to better inform patients of their 

financial obligations? Should HHAs 

play any role in helping to inform 

patients of what their out-of-pocket 

obligations will be? 

• If HHAs were required to provide 

patients with information on what 

Medicare pays for a particular service 

performed by that HHA, what changes 

would need to be made by HHAs? What 

burden would be added as a result of 

such a requirement? 

In addition, we are seeking public 

comment on improving a Medigap 

patient’s understanding of his or her 

out-of-pocket costs prior to receiving 

services, especially with respect to the 

following particular questions: 

• How does Medigap coverage affect 

patients’ understanding of their out-ofpocket costs before they receive care? 

What challenges do HHAs face in 

providing information about out-ofpocket costs to patients with Medigap? 

What changes can Medicare make to 

support HHAs that share out-of-pocket 

cost information with patients that 

reflects the patient’s Medigap coverage? 

Who is best situated to provide patients 

with clear Medigap coverage 

information on their out-of-pocket costs 

prior to receipt of care? What role can 

Medigap plans play in providing 

information to patients on their 

expected out-of-pocket costs for a 

service? What state-specific 

requirements or programs help educate 

Medigap patients about their out-ofpocket costs prior to receipt of care? 

VII. Collection of Information 

Requirements 

Under the Paperwork Reduction Act 

of 1995, we are required to provide 60- 

day notice in the Federal Register and 

solicit public comment before a 

collection of information requirement is 

submitted to the Office of Management 


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108The OASIS-based HH QRP outcome measures 

that use OASIS Item M1730 as a risk adjuster in the 

calculation of the measure are: Improvement in 

Bathing (NQF #0174), Improvement in Bed 

Transferring (NQF #0175), Improvement in 

Ambulation/Locomotion (NQF #0167), 

Improvement in Dyspnea, Improvement in Pain 

Interfering with Activity (NQF #0177), 

Improvement in Management of Oral Medications 

(NQF #0176), and Improvement in Status of 

Surgical Wounds (NQF #0178). 

and Budget (OMB) for review and 

approval. In order to fairly evaluate 

whether an information collection 

should be approved by OMB, section 

3506(c)(2)(A) of the Paperwork 

Reduction Act of 1995 requires that we 

solicit comment on the following issues: 

• The need for the information 

collection and its usefulness in carrying 

out the proper functions of our agency. 

• The accuracy of our estimate of the 

information collection burden. 

• The quality, utility, and clarity of 

the information to be collected. 

• Recommendations to minimize the 

information collection burden on the 

affected public, including automated 

collection techniques. 

A. Wage Estimates 

To derive average costs, we used data 

from the U.S. Bureau of Labor Statistics’ 

May 2017 National Occupational 

Employment and Wage Estimates for all 

salary estimates (http://www.bls.gov/ 

oes/current/oes_nat.htm). In this regard, 

the following table (Table 57) presents 

the mean hourly wage rate, fringe 

benefits costs and overhead (calculated 

at 100 percent of salary), and the 

adjusted hourly wage. 

TABLE 57—MAY 2017 NATIONAL INDUSTRY–SPECIFIC OCCUPATIONAL EMPLOYMENT AND WAGE ESTIMATES—NAICS 

621600—HOME HEALTH CARE SERVICES

Occupation title Occupation 

code 

Mean 

hourly wage 

($/hr) 

Fringe 

benefits and 

overhead 

(100%) ($/hr) 

Adjusted 

hourly wage 

($/hr) 

Registered Nurse (RN) .................................................................................... 29–1141 $33.77 $33.77 $67.54 

Physical therapists HHAs ................................................................................ 29–1123 46.19 46.19 92.38 

Speech-Language Pathologists (SLP) ............................................................ 29–1127 43.93 43.93 87.86 

Occupational Therapists (OT) ......................................................................... 29–1122 43.70 43.70 87.40 

This proposed rule makes reference to 

associated information collections that 

are not discussed in the regulation text 

contained in this document. These 

proposed changes are associated with 

the Information Collection Request (ICR) 

for CMS–10545—Outcome and 

Assessment Information Set (OASIS) 

OASIS–C2/ICD–10, approved under 

OMB control number 0938–1279. We 

note that on March 12, 2018 we 

published a notice in the Federal 

Register seeking public comment on a 

revision to CMS–10545 (OMB control 

number 0938–1279), which would 

modify the OASIS and refer to the 

revised item set as the OASIS–D upon 

implementation of the revised data set 

on January 1, 2019 (83 FR 10730). We 

are soliciting public comment on 

additional changes related to when 

certain OASIS items are required to be 

completed by HHA clinicians due to the 

proposed implementation of the patientdriven groupings model (PDGM) for CY 

2020, as outlined in section III.F of this 

proposed rule; and the changes to due 

to the proposed removal of HH QRP 

measures beginning with the CY 2021 

HH QRP, as outlined in section V.E of 

this proposed rule. 

B. ICRs Regarding the OASIS 

We believe that the burden associated 

with the OASIS is the time and effort 

associated with data collection and 

reporting. As of April 1, 2018, there are 

approximately 11,623 HHAs reporting 

OASIS data to CMS. 

In section V.E.1 of the proposed rule, 

we are proposing to remove the 

Depression Assessment Conducted 

Measure from the HH QRP beginning 

with the CY 2021 HH QRP under our 

proposed Factor 1. Measure 

performance among HHAs is so high 

and unvarying that meaningful 

distinctions in improvements in 

performance can no longer be made. 

The removal of this measure will not 

impact collection of information 

because OASIS Item M1730, which is 

used to calculate this measure, is also 

used as a risk adjuster to calculate other 

OASIS-based outcome measures 

currently adopted for the HH QRP.108

In section V.E.2 of the proposed rule, 

we are proposing to remove the Diabetic 

Foot Care and Patient/Caregiver 

Education Implemented during All 

Episodes of Care Measure from the HH 

QRP beginning with the CY 2021 HH 

QRP under our proposed Factor 1. 

Measure performance among HHAs is so 

high and unvarying that meaningful 

distinctions in improvements in 

performance can no longer be made. 

This measure is calculated using OASIS 

Item M2401, row a at the time point of 

Transfer to an Inpatient Facility (TOC) 

and Discharge from Agency—Not to an 

Inpatient Facility (Discharge). 

Specifically, we are proposing to 

remove this one data element at the 

TOC and Discharge time points. 

In section V.E.3 of the proposed rule, 

we are proposing to remove the 

Multifactor Fall Risk Assessment 

Conducted For All Patients Who Can 

Ambulate (NQF #0537) Measure from 

the HH QRP beginning with the CY 

2021 HH QRP under our proposed 

Factor 1. Measure performance among 

HHAs is so high and unvarying that 

meaningful distinctions in 

improvements in performance can no 

longer be made. This measure is 

calculated using OASIS Item M1910 at 

the time point of SOC/ROC. 

Specifically, we are proposing to 

remove this one data element at the 

SOC/ROC time point. 

In section V.E.4 of the proposed rule, 

we are proposing to remove the 

Pneumococcal Polysaccharide Vaccine 

Ever Received Measure from the HH 

QRP beginning with the CY 2021 HH 

QRP, under our proposed Factor 3. A 

measure does not align with current 

clinical guidelines or practice. This 

measure is calculated using OASIS 

Items M1051 and M1056 at the time 

points of TOC and Discharge. 

Specifically, we are proposing to 

remove these two data elements at the 

TOC and Discharge time points. 

In section V.E.5 of the proposed rule, 

we are proposing to remove the 

Improvement in the Status of Surgical 

Wounds Measure from the HH QRP 

beginning with the CY 2021 HH QRP 

under our proposed Factor 4. A more 

broadly applicable measure (across 

settings, populations, or conditions) for 

the particular topic is available. The 

removal of this measure will not impact 

collection of information because 

OASIS Items M1340 and M1342 are 


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109The OASIS-based HH QRP outcome measures 

that use OASIS Items M1340 and M1342 as a risk 

adjuster in the calculation of the measure are: 

Improvement in Bathing (NQF #0174), 

Improvement in Bed Transferring (NQF #0175), 

Improvement in Ambulation/Locomotion (NQF 

#0167), Improvement in Dyspnea, Improvement in 

Pain Interfering with Activity (NQF #0177), and 

Improvement in Management of Oral Medications 

(NQF #0176). 

110Measure specifications can be found in the 

Home Health Potentially Avoidable Events 

Measures Table on the Home Health Quality 

Measures website (https://www.cms.gov/Medicare/ 

Quality-Initiatives-Patient-Assessment-Instruments/ 

HomeHealthQualityInits/Downloads/Home-HealthPAE-Measures-Table-OASIS-C2_4-11-18.pdf). 

used as risk adjusters to calculate other 

OASIS-based outcome measures 

currently adopted for the HH QRP and 

OASIS Items M1340 and M1342 are also 

used for the Potentially Avoidable 

Events measure Discharged to the 

Community Needing Wound Care or 

Medication Assistance that is used by 

HH surveyors during the survey 

process.109 110

In sections V.E.6 and V.E.7 of the 

proposed rule, we are proposing to 

remove the Emergency Department Use 

without Hospital Readmission during 

the First 30 Days of HH (NQF #2505) 

Measure and the Rehospitalization 

during the First 30 Days of HH (NQF 

#2380) Measure from the HH QRP 

beginning with the CY 2021 HH QRP 

under our proposed Factor. A more 

broadly applicable measure (across 

settings, populations, or conditions) for 

the particular topic is available. Because 

these are both claims-based measures, 

their removal will not impact collection 

of information. 

Therefore, we are proposing the net 

reduction of 1 data element at SOC, 1 

data element at ROC, 3 data elements at 

TOC and 3 data elements at Discharge 

associated with OASIS item collection 

as a result of the measure removal 

proposals from the HH QRP. 

The OASIS instrument is used for 

meeting the home health Conditions of 

Participation, requirements under the 

HH QRP, and for payment purposes 

under the HH PPS. As outlined in 

section III.F of this proposed rule, to 

calculate the case-mix adjusted payment 

amount for the PDGM, we are proposing 

to add collection of two current OASIS 

items (10 data elements) at the FU time 

point: 

• M1033: Risk for Hospitalization 

(9 data elements) 

• M1800: Grooming (1 data element) 

As outlined in section III.F of this 

proposed rule, several OASIS items 

would not be needed in case-mix 

adjusting the period payment for the 

PDGM; therefore, we are proposing to 

make 19 current OASIS items (48 data 

elements) optional at the FU time point: 

• M1021: Primary Diagnosis (3 data 

elements) 

• M1023: Other Diagnosis (15 data 

elements) 

• M1030: Therapies (3 data elements) 

• M1200: Vision (1 data element) 

• M1242: Frequency of Pain Interfering 

(1 data element) 

• M1311: Current Number of Unhealed 

Pressure Ulcers at Each Stage (12 data 

elements) 

• M1322: Current Number of Stage 1 

Pressure Ulcers (1 data element) 

• M1324: Stage of Most Problematic 

Unhealed Pressure Ulcer that is 

Stageable (1 data element) 

• M1330: Does this patient have a Stasis 

Ulcer? (1 data element) 

• M1332: Current Number of Stasis 

Ulcer(s) that are Observable (1 data 

element) 

• M1334: Status of Most Problematic 

Stasis Ulcer that is Observable (1 data 

element) 

• M1340: Does this patient have a 

Surgical Wound (1 data element) 

• M1342: Status of Most Problematic 

Surgical Wound that is Observable 

(1 data element) 

• M1400: Short of Breath (1 data 

element) 

• M1610: Urinary Incontinence or 

Urinary Catheter Presence (1 data 

element) 

• M1620: Bowel Incontinence 

Frequency (1 data element) 

• M1630: Ostomy for Bowel 

Elimination (1 data element) 

• M2030: Management of Injectable 

Medications (1 data element) 

• M2200: Therapy Need (1 data 

element) 

Therefore, we are proposing the net 

reduction of 38 data elements at FU 

associated with OASIS item collection 

as a result of the implementation of the 

PDGM for CY 2020. 

In summary, under our proposals, 

there would be a net reduction of 1 data 

element at SOC, 1 data element at ROC, 

38 data elements at FU, 3 data elements 

at TOC and 3 data elements at Discharge 

associated with OASIS item collection 

as a result of the measure removal 

proposals from the HH QRP and the 

proposed implementation of the PDGM 

starting January 1, 2020. 

We assume that each data element 

requires 0.3 minutes of clinician time to 

complete. Therefore, we estimate that 

there would be a reduction in clinician 

burden per OASIS assessment of 0.3 

minutes at SOC, 0.3 minutes at ROC, 

11.4 minutes at FU, 0.9 minutes at TOC 

and 0.9 minutes at Discharge. 

The OASIS is completed by RNs or 

PTs, or very occasionally by 

occupational therapists (OT) or speech 

language pathologists (SLP/ST). Data 

from 2016 show that the SOC/ROC 

OASIS is completed by RNs 

(approximately 87 percent of the time), 

PTs (approximately 12.7 percent of the 

time), and other therapists, including 

OTs and SLP/STs (approximately 0.3 

percent of the time). We estimated a 

weighted clinician average hourly wage 

of $70.75, inclusive of fringe benefits, 

using the hourly wage data in Table 57. 

Individual providers determine the 

staffing resources necessary. 

Table 58 shows the total number of 

assessments submitted in CY 2017 and 

estimated burden at each time point. 

TABLE 58—CY 2017 OASIS SUBMISSIONS AND ESTIMATED BURDEN, BY TIME POINT

Time point 

CY 2017 

assessments 

completed 

Estimated 

burden 

($) 

Start of Care ................................................................................................................................................ 6,420,299 ¥$2,271,180.77 

Resumption of Care ..................................................................................................................................... 1,062,962 ¥376,022.81 

Follow-up ..................................................................................................................................................... 3,688,651 ¥49,584,691.07 

Transfer to an inpatient facility .................................................................................................................... 1,925,270 ¥2,043,192.79 

Death at Home ............................................................................................................................................ 41,183 0 

Discharge from agency ................................................................................................................................ 5,249,483 ¥5,571,013.83 

Total ...................................................................................................................................................... 18,387,848 ¥59,846,101.27 

* Estimated Burden ($) at each Time-Point = (# CY 2017 Assessments Completed) × (clinician burden [min]/60) × ($70.75 [weighted clinician 

average hourly wage]). 


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Based on the data in Table 58 for the 

11,623 active Medicare-certified HHAs 

in April 2018, we estimate the total 

average decrease in cost associated with 

proposed changes with OASIS item 

collection at $5,148.94 per HHA 

annually, or $59,846,101.27 for all 

HHAs annually. This corresponds to an 

estimated reduction in clinician burden 

associated with changes to collection of 

information associated with the OASIS 

of 72.8 hours per HHA annually, or 

845,881.3 hours for all HHAs annually. 

This decrease in burden would be 

accounted for in the information 

collection under OMB control number 

0938–1279. 

C. ICRs Regarding Home Infusion 

Therapy 

At § 486.520, Plan of Care, we propose 

that all patients must have a plan of care 

established by a physician that 

prescribes the type, amount, and 

duration of infusion therapy services 

that are to be furnished. This 

requirement directly implements 

section 5012 of the 21st Cures Act. 

Accredited home infusion therapy 

suppliers are already required by their 

accrediting bodies to provide all care in 

accordance with a plan of care that 

specifies the type, amount, and duration 

of infusion therapy services to be 

furnished to each patient; therefore this 

proposed requirement would not 

impose a burden upon accredited 

agencies. Furthermore, all existing home 

infusion therapy suppliers are already 

accredited due to existing payment 

requirements established by private 

insurers and Medicare Advantage plans. 

In accordance with the implementing 

regulations of the PRA at 5 CFR 

1320.3(b)(3), this requirement exists 

even in the absence of a federal 

requirement; therefore, the associated 

burden is not subject to the PRA. 

D. ICRs Regarding the Approval and 

Oversight of Accrediting Organizations 

for Home Infusion Therapy 

1. Background 

We are proposing to establish a new 

set of regulations related to the approval 

and oversight of accrediting 

organizations that accredit home 

infusion therapy suppliers. If finalized, 

these new regulatory requirements 

would impose burden on those new 

AOs that seek approval of their Home 

Infusion Therapy accreditation program. 

This burden would include, but is not 

limited to the time and costs associated 

with the following activities: (1) 

Preparation and filing of an initial 

application seeking CMS approval of the 

AOs home infusion therapy 

accreditation program; (2) participation 

in the application review process (that 

is, meetings, provide additional 

information and materials that may be 

required, participate in a site visit, etc.); 

(3) seeking new accreditation clients; (4) 

performing on-site surveys, off-site 

survey audits or the performance of 

other types of survey activities; (5) 

participation in CMS ongoing 

accreditation program review activities; 

(6) performance of periodic reaccreditation activities; (7) investigation 

of complaints and performing complaint 

surveys; (8) administration of the 

appeals process for providers that have 

been denied accreditation; (9) staff 

training, in-services and continuing 

education; and (10) ensuring that 

surveyor staff have the proper 

education, training, and credentials. 

The following is a discussion of the 

potential ICR burdens associated with 

the proposed home infusion therapy 

supplier accreditation oversight 

regulations and well as any PRA 

exceptions that may apply. 

2. Applicable PRA Exception 

We believe that the information 

collection burden associated with the 

preparation and submission of an initial 

or renewal application for approval and 

designation as an home infusion therapy 

AO and the participation in other 

accreditation related activities does not 

meet the definition of ‘‘collection of 

information’’ as defined in 5 CFR 

1320.3(c) because it is ‘‘not imposed on 

10 or more persons.’’ This information 

collection burden would be imposed 

only on those national AOs that accredit 

home infusion therapy suppliers. 

At this time, there are five CMSapproved AOs and one non-CMSapproved AO that provide accreditation 

for home infusion therapy suppliers 

(that is, The Joint Commission (TJC), 

Accreditation Commission for Health 

Care (ACHC), The Compliance Team 

(TCT), Community Health Accreditation 

Partner (CHAP), Healthcare Quality 

Association on Accreditation, and 

National Association of Boards of 

Pharmacy). However, these AOs offer 

home infusion therapy accreditation as 

part of the deeming accreditation of 

home health agencies or the home 

infusion therapy accreditation provided 

is CMS approved. 

In this proposed rule, we have 

proposed to require that these AO must 

apply for CMS approval of a home 

infusion therapy accreditation that is 

separate and distinct from its home 

health accreditation program. When we 

do solicit AOs to accredit home infusion 

therapy suppliers, we do not anticipate 

receiving more than the six applications 

which would be submitted by the 

existing AOs seeking approval of a 

home infusion therapy accreditation 

program, because this is a specialized 

area of accreditation. 

It is possible that the number of AOs 

that we designate to accredit home 

infusion therapy suppliers may increase 

to 10 or more in the future, when we 

begin accepting applications for home 

infusion therapy AOs. However, we do 

not anticipate that the number of AOs 

that would accredit home infusion 

therapy suppliers would increase to 10 

or more in the foreseeable future. 

Should the number of AOs that 

accredit home infusion therapy 

suppliers rise to 10 or more, we would 

prepare and submit an information 

collection request (ICR) for the burden 

associated with the accreditation 

process, as well as obtain OMB 

approval, prior to accepting additional 

applications. 

E. ICR Regarding Modifications to 42 

CFR 488.5 

We have proposed to modify the AO 

approval and oversight regulations for 

Medicare certified providers and 

suppliers by adding 2 new 

requirements. The first proposed new 

requirement is to added to § 488.5(a)(7) 

and is a requirement that in their 

application for CMS approval, the AOs 

that accredited Medicare certified 

providers and suppliers must include a 

statement acknowledging that all 

accrediting organization surveyors have 

completed or will complete the relevant 

program specific CMS online trainings 

established for state surveyors, initially, 

and thereafter. The second requirement 

is to be added as § 488.5(a)(18)(iii) and 

would require that the AOs for Medicare 

certified providers and suppliers 

include a written statement in their 

application for CMS approval agreeing 

that if a fully accredited and deemed 

facility in good standing provides 

written notification that they wish to 

voluntarily withdraw from the 

accrediting organization’s CMSapproved accreditation program, the 

accrediting organization must continue 

the facility’s current accreditation in full 

force and effect until the effective date 

of withdrawal identified by the facility 

or the expiration date of the term of 

accreditation, whichever comes first. 

1. Burden Associated With CMS Online 

Training for AO Surveyors 

CMS provides a number of online 

surveyor training modules that are 

available to the State Survey Agency 

surveyors. We have proposed to require 

the AO surveyors to take this training in 

an attempt to decrease the historically 


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high disparity rate between the AOs 

survey results and those of the 

validation surveys performed by the 

State Survey Agency surveyors. 

There are a total of 163 online training 

programs that are available the State 

Survey Agency surveyors on the CMS 

Surveyor Training website. This website 

provides courses that are general in 

nature such as ‘‘Principles of 

Documentation Learning Activity—Long 

Term Care’’ and ‘‘Basic Writing Skills 

for Surveyor Staff’’, infection control, 

patient safety, Emergency Preparedness. 

The CMS Surveyor Training website 

also offers courses related to specific 

healthcare settings, services, and 

regulations such as hospitals, CAHs, 

ASCs, CLIA, Community Mental Health 

Centers, EMTALA, Federally Qualified 

Health Centers (FQHCs), Home Health 

Agencies and OASIS, Hospices, Nursing 

Homes and the MDS, Outpatient 

Physical Therapy/Outpatient Speech 

Therapy. These courses are self-paced 

and the person taking the course can 

take the courses over a period of time. 

The amount of time required to 

complete each of these training course 

varies depending on the pace at which 

the trainee completes the training. 

We estimate that each SA surveyor 

takes approximately 10 of these courses. 

We further estimate that it would take 

approximately 3–5 hours to complete 

each of these courses. Therefore a SA 

surveyor would incur a time burden of 

30–50 hours for the completion of these 

CMS surveyor training courses. We 

believe that the surveyors for AOs that 

accredit Medicare certified providers 

would need to take the same number 

and type of surveyor training courses as 

the SA surveyors (that is— 

approximately 10 courses). This means 

that each of the AOs surveyors that 

takes this training would incur a time 

burden in the amount of 30–50 hours. 

The AOs that accredit Medicare 

certified providers and suppliers would 

incur a cost burden for the wages of 

their surveyors for the time they spend 

taking these online surveyor training 

courses. Most surveyors are clinicians 

such as Registered Nurses. According to 

the U.S. Bureau of Labor Statistics, the 

mean hourly wage for a Registered 

Nurse is $35.36 (https://www.bls.gov/ 

oes/current/oes291141.htm). As noted 

above, we estimated that it would take 

approximately 30–50 hours for each AO 

surveyor to complete 10 online surveyor 

courses. Therefore, the AO would incur 

wages in the amount of $1,060.80 to 

$1,768.00 per each surveyor that 

completes the CMS online surveyor 

training. The AO would also incur 

additional costs for fringe benefits and 

overhead in the amount of $1,060.80 to 

$1,768.00 per each surveyor that 

completes the CMS online surveyor 

training. 

We are not able to accurately estimate 

to total time and cost burden to each AO 

for the wages incurred for the time spent 

by all surveyors of that AO that take the 

CMS online surveyor training courses, 

because we do not know exactly how 

many surveyors each AO has. However, 

if we estimate that each AO has 15 

surveyors, the estimated time burden to 

each AO associated with this 

requirement would be 450 to 750 hours 

((30 hours × 15 surveyors = 450 hours 

per all surveyors) and (50 hours × 15 

surveyors = 750 hours per all 

surveyors)). The estimated cost burden 

to each AO for Medicare certified 

providers and supplies associated with 

this requirement would be $31,824 to 

$53,040 (($1,060.80 × 15 = $15,912) and 

($1,768.00 × 15= $26,520) and ($15,912 

to $26,520 for fringe benefits and 

overhead)). 

There are currently 9 AOs that 

accredit Medicare certified providers 

and suppliers. We estimate that the time 

burden across all of these AOs 

associated with the requirement that 

their surveyors take the CMS online 

surveyor training would be 4,050 to 

6,750 ((450 hours per all surveyors/AO 

× 9 AOs = 4,050 hours across all AOs) 

and (750 hours per all surveyors/AO × 

9 AOs = 6,750 hours across all AOs). 

The estimated cost across all AOs that 

accredit Medicare certified providers 

and suppliers would be $763,776 

($15,912 × 9 AOs = $143,208) and 

($26,520 × 9 AOs = $238,680) and 

($381,888 for fringe benefits and 

overhead). 

However, we believe that the 

information collection burden 

associated with the requirement that the 

surveyors of AOs that accredit Medicare 

certified providers and suppliers does 

not meet the definition of ‘‘collection of 

information’’ as defined in 5 CFR 

1320.3(c) because it is ‘‘not imposed on 

10 or more persons.’’ This information 

collection burden would be imposed 

only on those AOs that accredit 

Medicare certified providers and 

suppliers. At this time, there are nine 

CMS-approved AOs that accredit 

Medicare certified providers and 

suppliers (that is, AAAASF, AAAHC, 

ACHC, AOA–HFAP, Community Health 

Accreditation Partner (CHAP), CIHQ, 

DNV–GL, The Joint Commission (TJC), 

Accreditation Commission for Health 

Care (ACHC), The Compliance Team 

(TCT)). Should the number of AOs that 

accredit Medicare certified providers 

and suppliers rise to 10 or more, we will 

seek OMB approval for the burden 

associated with the accreditation 

process. 

2. Burden Associated With the 

Requirement for AOs To Continue a 

Medicare-Certified Provider’s or 

Supplier’s Accreditation 

This proposal would require the AOs 

for Medicare certified providers and 

suppliers to include a written statement 

in their application for CMS approval of 

their accreditation program, agreeing 

that if a fully accredited and deemed 

facility in good standing provides 

written notification that they wish to 

voluntarily withdraw from the 

accrediting organization’s CMSapproved accreditation program, the 

accrediting organization must continue 

the facility’s current accreditation in full 

force and effect until the effective date 

of withdrawal identified by the facility 

or the expiration date of the term of 

accreditation, whichever comes first. 

We believe that the AO would incur 

limited burden associated with this task, 

because this regulation simply requires 

that the AOs include a written statement 

in their application stating that they 

agree to continue the facility’s current 

accreditation in full force and effect 

until the effective date of withdrawal 

identified by the facility or the 

expiration date of the term of 

accreditation, whichever comes first, if 

a provider of supplier provides written 

notification that they wish to 

voluntarily withdraw from the 

accrediting organization’s CMSapproved accreditation program. All 

AOs that accredit Medicare certified 

providers and suppliers are required to 

submit an initial application to CMS 

when they first seek CMS approval and 

to submit renewal applications to CMS 

every 6 years thereafter. In accordance 

wirh 42 CFR 488.5, the AOs are required 

to provide a number of written 

acknowledgements with their 

application. We believe that the AO 

could add the required written 

statement to the other written 

acknowledgements that are included 

with their applications. As the AO 

would already be preparing the other 

acknowledgements required to be 

submitted with their application, it 

would be little if any additional burden 

for the AO to add the required written 

statement to their application. 

We estimate that the required written 

statement would consist of only 1–2 

sentences and would take no more than 

5 minutes to prepare. We further believe 

that clinicians such as registered nurses 

would prepare the required statement to 

be included in the AOs application. 

According to the U.S. Bureau of Labor 

Statistics, the mean hourly wage for a 


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non-industry specific registered nurse is 

$35.36 (https://www.bls.gov/oes/ 

current/oes291141.htm). Therefore, the 

estimated cost burden to the AOs 

associated with the preparation of the 

written statement would be 

approximately $17.68 (15 minutes × 

$35.36 per hour = $8.84 plus $8.84 in 

fringe benefits and overhead = $17.68). 

There are 9 AOs that accredit 

Medicare certified providers and 

suppliers. The estimated time burden 

across all of these AOs would be 45 

minutes (15 minutes × 9 AOs = 135 

minutes per all AOs). The estimated 

cost burden across all AOs that accredit 

Medicare certified providers and 

suppliers would be $159.12 ($8.84 × 9 

AOs = $79.56 per all AOs + $79.56 for 

fringe benefits and overhead). 

However, we believe that the 

information collection burden 

associated with the requirement that the 

AOs that accredit Medicare certified 

providers and suppliers provide a 

written statement in their application 

stating that they agree to continue the 

facility’s current accreditation in full 

force and effect until the effective date 

of withdrawal identified by the facility 

or the expiration date of the term of 

accreditation, whichever comes first, if 

a provider or supplier provides written 

notification that they wish to 

voluntarily withdraw from the 

accrediting organization’s CMSapproved accreditation program, does 

not meet the definition of ‘‘collection of 

information’’ as defined in 5 CFR 

1320.3(c) because it is ‘‘not imposed on 

10 or more persons.’’ This information 

collection burden would be imposed 

only on those AOs that accredit 

Medicare-certified providers and 

suppliers. At this time, there are nine 

CMS-approved AOs that accredit 

Medicare-certified providers and 

suppliers (that is, AAAASF, AAAHC, 

ACHC, AOA–HFAP, Community Health 

Accreditation Partner (CHAP), CIHQ, 

DNV–GL, The Joint Commission (TJC), 

The Compliance Team (TCT)). Should 

the number of AOs that accredit 

Medicare certified providers or 

suppliers rise to 10 or more, we will 

seek OMB approval for the burden 

associated with the accreditation 

process. 

F. Submission of PRA-Related 

Comments 

We have submitted a copy of this 

proposed rule to OMB for its review of 

the rule’s information collection and 

recordkeeping requirements. The 

requirements are not effective until they 

have been approved by OMB. 

We invite public comments on these 

information collection requirements. If 

you wish to comment, please identify 

the rule (CMS–1689–P) and, where 

applicable, the ICR’s CFR citation, CMS 

ID number, and OMB control number. 

To obtain copies of a supporting 

statement and any related forms for the 

proposed collection(s) summarized in 

this notice, you may make your request 

using one of following: 

1. Access CMS’ website address at 

https://www.cms.gov/Regulations-andGuidance/Legislation/PaperworkRed

uctionActof1995/PRA-Listing.html. 

2. Email your request, including your 

address, phone number, OMB number, 

and CMS document identifier, to 

Paperwork@cms.hhs.gov. 

3. Call the Reports Clearance Office at 

(410) 786–1326. 

See this rule’s DATES and ADDRESSES

sections for the comment due date and 

for additional instructions. 

VIII. Regulatory Impact Analysis 

A. Statement of Need 

1. Home Health Prospective Payment 

System (HH PPS) 

Section 1895(b)(1) of the Act requires 

the Secretary to establish a HH PPS for 

all costs of home health services paid 

under Medicare. In addition, section 

1895(b) of the Act requires: (1) The 

computation of a standard prospective 

payment amount include all costs for 

home health services covered and paid 

for on a reasonable cost basis and that 

such amounts be initially based on the 

most recent audited cost report data 

available to the Secretary; (2) the 

prospective payment amount under the 

HH PPS to be an appropriate unit of 

service based on the number, type, and 

duration of visits provided within that 

unit; and (3) the standardized 

prospective payment amount be 

adjusted to account for the effects of 

case-mix and wage levels among HHAs. 

Section 1895(b)(3)(B) of the Act 

addresses the annual update to the 

standard prospective payment amounts 

by the HH applicable percentage 

increase. Section 1895(b)(4) of the Act 

governs the payment computation. 

Sections 1895(b)(4)(A)(i) and 

(b)(4)(A)(ii) of the Act require the 

standard prospective payment amount 

to be adjusted for case-mix and 

geographic differences in wage levels. 

Section 1895(b)(4)(B) of the Act requires 

the establishment of appropriate casemix adjustment factors for significant 

variation in costs among different units 

of services. Lastly, section 1895(b)(4)(C) 

of the Act requires the establishment of 

wage adjustment factors that reflect the 

relative level of wages, and wage-related 

costs applicable to home health services 

furnished in a geographic area 

compared to the applicable national 

average level. 

Section 1895(b)(3)(B)(iv) of the Act 

provides the Secretary with the 

authority to implement adjustments to 

the standard prospective payment 

amount (or amounts) for subsequent 

years to eliminate the effect of changes 

in aggregate payments during a previous 

year or years that were the result of 

changes in the coding or classification 

of different units of services that do not 

reflect real changes in case-mix. Section 

1895(b)(5) of the Act provides the 

Secretary with the option to make 

changes to the payment amount 

otherwise paid in the case of outliers 

because of unusual variations in the 

type or amount of medically necessary 

care. Section 1895(b)(3)(B)(v) of the Act 

requires HHAs to submit data for 

purposes of measuring health care 

quality, and links the quality data 

submission to the annual applicable 

percentage increase. Section 50208 of 

the BBA of 2018 (Pub. L. 115–123) 

requires the Secretary to implement a 

new methodology used to determine 

rural add-on payments for CYs 2019 

through 2022. 

Section 1895(b)(2) of the Act and 

section 1895(b)(3)(A) of the Act, as 

amended by section 51001(a)(1) and 

51001(a)(2) of the BBA of 2018 

respectively, require the Secretary to 

implement a 30-day unit of service, 

effective for CY 2020, and calculate a 

30-day payment amount for CY 2020 in 

a budget neutral manner, respectively. 

In addition, section 1895(b)(4)(B) of the 

Act, as amended by section 51001(a)(3) 

of the BBA of 2018 requires the 

Secretary to eliminate the use of the 

number of therapy visits provided to 

determine payment, also effective for 

CY 2020. 

Finally, the HHVBP Model applies a 

payment adjustment based on an HHA’s 

performance on quality measures to test 

the effects on quality and expenditures. 

2. Home Infusion Therapy 

Section 1861(iii) of the Act, as added 

by the Cures Act, sets forth three 

elements for home infusion therapy 

suppliers in three areas: (1) Ensuring 

that all patients have a plan of care 

established and updated by a physician 

that sets out the care and prescribed 

infusion therapy necessary to meet the 

patient-specific needs, (2) having 

procedures to ensure that remote 

monitoring services associated with 

administering infusion drugs in a 

patient’s home are provided, and (3) 

having procedures to ensure that 

patients receive education and training 

on the effective use of medications and 

equipment in the home. These 


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provisions serve as the basis for 

suppliers to participate in Medicare. 

Section 1834(u) of the Act serves as 

the basis for the establishment of a 

prospective payment system for home 

infusion therapy covered under 

Medicare. Section 1834(u)(7) of the Act, 

as added by BBA of 2018 requires the 

Secretary to provide a temporary 

transitional payment to eligible home 

infusion therapy suppliers for items and 

services associated with the furnishing 

of transitional home infusion drugs for 

CYs 2019 and 2020. Under this payment 

methodology (as described in section 

VI.C. of this proposed rule), the 

Secretary would establish three 

payment categories at amounts equal to 

the amounts determined under the 

Physician Fee Schedule established 

under section 1848 for services 

furnished during CY 2019 for codes and 

units of such codes, determined without 

application of the geographic 

adjustment. 

Section 1834(u)(5)(B) of the Act 

requires the Secretary to designate 

organizations to accredit qualified home 

infusion therapy suppliers furnishing 

home infusion therapy no later than 

January 1, 2021. Qualified home 

infusion therapy suppliers must furnish 

infusion therapy to individuals with 

acute or chronic conditions requiring 

administration of home infusion drugs; 

ensure the safe and effective provision 

and administration of home infusion 

therapy on a 7-day-a-week, 24-hour-aday basis; be accredited by an 

accrediting organization designated and 

approved by the Secretary; and meet 

other such requirements as the Secretary 

deems appropriate. 

B. Overall Impact 

We have examined the impacts of this 

rule as required by Executive Order 

12866 on Regulatory Planning and 

Review (September 30, 1993), Executive 

Order 13563 on Improving Regulation 

and Regulatory Review (January 18, 

2011), the Regulatory Flexibility Act 

(RFA) (September 19, 1980, Pub. L. 96– 

354), section 1102(b) of the Social 

Security Act, section 202 of the 

Unfunded Mandates Reform Act of 1995 

(March 22, 1995; Pub. L. 104–4), 

Executive Order 13132 on Federalism 

(August 4, 1999), the Congressional 

Review Act (5 U.S.C. 804(2)), and 

Executive Order 13771 on Reducing 

Regulation and Controlling Regulatory 

Costs (January 30, 2017). 

Executive Orders 12866 and 13563 

direct agencies to assess all costs and 

benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributive impacts, and 

equity). Section 3(f) of Executive Order 

12866 defines a ‘‘significant regulatory 

action’’ as an action that is likely to 

result in a rule: (1) Having an annual 

effect on the economy of $100 million 

or more in any 1 year, or adversely and 

materially affecting a sector of the 

economy, productivity, competition, 

jobs, the environment, public health or 

safety, or state, local or tribal 

governments or communities (also 

referred to as ‘‘economically 

significant’’); (2) creating a serious 

inconsistency or otherwise interfering 

with an action taken or planned by 

another agency; (3) materially altering 

the budgetary impacts of entitlement 

grants, user fees, or loan programs or the 

rights and obligations of recipients 

thereof; or (4) raising novel legal or 

policy issues arising out of legal 

mandates, the President’s priorities, or 

the principles set forth in the Executive 

Order. 

A regulatory impact analysis (RIA) 

must be prepared for major rules with 

economically significant effects ($100 

million or more in any 1 year). The net 

transfer impact related to the changes in 

payments under the HH PPS for CY 

2019 is estimated to be $400 million (2.1 

percent). The net transfer impact in CY 

2020 related to the change in the unit of 

payment under the proposed PDGM is 

estimated to be $0 million as section 

51001(a) of the BBA of 2018 requires 

such change to be implemented in a 

budget-neutral manner. The net transfer 

impact in CY 2019 related to the 

Temporary Transitional Payment for 

Home Infusion Therapy is estimated to 

be $60 million. The savings impacts 

related to the HHVBP model as a whole 

are estimated at $378 million. The cost 

impact related to OASIS item collection 

as a result of the proposed 

implementation of the PDGM and 

proposed changes to the HH QRP is 

estimated to be a net $60 million in 

annualized cost savings to HHAs, 

discounted at 7 percent relative to year 

2016, over a perpetual time horizon 

beginning in CY 2020. Finally, the 

estimated cost impact to each potential 

home infusion therapy AO is $23,258. 

We estimate that this rulemaking is 

‘‘economically significant’’ as measured 

by the $100 million threshold, and 

hence also a major rule under the 

Congressional Review Act. Accordingly, 

we have prepared a Regulatory Impact 

Analysis that to the best of our ability 

presents the costs and benefits of the 

rulemaking. 

C. Anticipated Effects 

The RFA requires agencies to analyze 

options for regulatory relief of small 

entities, if a rule has a significant impact 

on a substantial number of small 

entities. For purposes of the RFA, small 

entities include small businesses, 

nonprofit organizations, and small 

governmental jurisdictions. Most 

hospitals and most other providers and 

suppliers are small entities, either by 

nonprofit status or by having revenues 

of less than $7.5 million to $38.5 

million in any one year. For the 

purposes of the RFA, we estimate that 

almost all HHAs are small entities as 

that term is used in the RFA. 

Individuals and states are not included 

in the definition of a small entity. The 

economic impact assessment is based on 

estimated Medicare payments 

(revenues) and HHS’s practice in 

interpreting the RFA is to consider 

effects economically ‘‘significant’’ only 

if greater than 5 percent of providers 

reach a threshold of 3 to 5 percent or 

more of total revenue or total costs. The 

majority of HHAs’ visits are Medicare 

paid visits and therefore the majority of 

HHAs’ revenue consists of Medicare 

payments. Based on our analysis, we 

conclude that the policies proposed in 

this rule would result in an estimated 

total impact of 3 to 5 percent or more 

on Medicare revenue for greater than 5 

percent of HHAs. Therefore, the 

Secretary has determined that this HH 

PPS proposed rule would have a 

significant economic impact on a 

substantial number of small entities. 

In addition, section 1102(b) of the Act 

requires us to prepare a RIA if a rule 

may have a significant impact on the 

operations of a substantial number of 

small rural hospitals. This analysis must 

conform to the provisions of section 603 

of RFA. For purposes of section 1102(b) 

of the Act, we define a small rural 

hospital as a hospital that is located 

outside of a metropolitan statistical area 

and has fewer than 100 beds. This rule 

is not applicable to hospitals. Therefore, 

the Secretary has determined this 

proposed rule would not have a 

significant economic impact on the 

operations of small rural hospitals. 

Section 202 of the Unfunded 

Mandates Reform Act of 1995 (UMRA) 

also requires that agencies assess 

anticipated costs and benefits before 

issuing any rule whose mandates 

require spending in any 1 year of $100 

million in 1995 dollars, updated 

annually for inflation. In 2018, that 

threshold is approximately $150 

million. This rule is not anticipated to 

have an effect on State, local, or tribal 


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governments, in the aggregate, or on the 

private sector of $150 million or more. 

Executive Order 13132 establishes 

certain requirements that an agency 

must meet when it promulgates a 

proposed rule (and subsequent final 

rule) that imposes substantial direct 

requirement costs on state and local 

governments, preempts State law, or 

otherwise has Federalism implications. 

We have reviewed this proposed rule 

under these criteria of Executive Order 

13132, and have determined that it will 

not impose substantial direct costs on 

state or local governments. If regulations 

impose administrative costs on private 

entities, such as the time needed to read 

and interpret this proposed rule, we 

must estimate the cost associated with 

regulatory review. Due to the 

uncertainty involved with accurately 

quantifying the number of entities that 

would review the rule, we assume that 

the total number of unique commenters 

on this year’s proposed rule would be 

the similar to the number of reviewers 

of last year’s proposed rule. We 

acknowledge that this assumption may 

understate or overstate the costs of 

reviewing this rule. It is possible that 

not all commenters reviewed this year’s 

rule in detail, and it is also possible that 

some reviewers chose not to comment 

on the proposed rule. For these reasons 

we thought that the number of past 

commenters would be a fair estimate of 

the number of reviewers of this rule. We 

welcome any comments on the 

approach in estimating the number of 

entities which would review this 

proposed rule. We also recognize that 

different types of entities are in many 

cases affected by mutually exclusive 

sections of this proposed rule, and 

therefore for the purposes of our 

estimate we assume that each reviewer 

reads approximately 50 percent of the 

rule. We seek comments on this 

assumption. Using the wage information 

from the BLS for medical and health 

service managers (Code 11–9111), we 

estimate that the cost of reviewing this 

rule is $107.38 per hour, including 

overhead and fringe benefits (https://

www.bls.gov/oes/current/oes_nat.htm. 

Assuming an average reading speed of 

250 words per minute, we estimate that 

it would take approximately 5.3 hours 

for the staff to review half of this 

proposed rule, which consists of 

approximately 160,000 words. For each 

HHA that reviews the rule, the 

estimated cost is $569.11 (5.3 hours × 

$107.38). Therefore, we estimate that 

the total cost of reviewing this 

regulation is $767,729.39 ($569.11 × 

1,349 reviewers). 

1. HH PPS 

a. HH PPS for CY 2019 

The update set forth in this rule 

applies to Medicare payments under HH 

PPS in CY 2019. Accordingly, the 

following analysis describes the impact 

in CY 2019 only. We estimate that the 

net impact of the policies in this rule is 

approximately $400 million in 

increased payments to HHAs in CY 

2019. We applied a wage index budget 

neutrality factor and a case-mix weight 

budget neutrality factor to the rates as 

discussed in section III.C.3 of this 

proposed rule. Therefore, the estimated 

impact of the 2019 wage index and the 

recalibration of the case-mix weights for 

CY 2019 is $0 million. The $400 million 

increase reflects the distributional 

effects of the CY 2019 home health 

payment update of 2.1 percent ($400 

million increase), a 0.1 percent increase 

in payments due to decreasing the FDL 

ratio in order to target to pay no more 

than 2.5 percent of total payments as 

outlier payments ($20 million increase) 

and a 0.1 percent decrease in payments 

due to the new rural add-on policy 

mandated by the BBA of 2018 for CY 

2019 ($20 million decrease). The $400 

million in increased payments is 

reflected in the last column of the first 

row in Table 59 as a 2.1 percent increase 

in expenditures when comparing CY 

2018 payments to estimated CY 2019 

payments. 

With regards to options for regulatory 

relief, the rural add-on policy for CYs 

2019 through 2022 is statutory and we 

do not have the authority to alter the 

methodology used to categorize rural 

counties or to revise the rural add-on 

percentages. 

b. HH PPS for CY 2020 (Proposed 

PDGM) 

We estimate no net impact of the 

proposed policies related to the 

implementation of the PDGM for the CY 

2020 HH PPS, as the transition to the 

30-day unit of payment is required to be 

budget neutral. However, since the 

PDGM eliminates the use of therapy 

thresholds as a factor in determining 

payment, HHAs that provide more 

nursing visits, and thus experience 

lower margins under the current 

payment system which may incentivize 

overutilization of therapy, may 

experience higher payments. 

Conversely, HHAs that provide more 

therapy visits compared to nursing 

visits, and thus may profit more from 

the current payment system, may 

experience lower payments. 

c. Proposed Elimination of 

Recertification Requirement To Estimate 

How Much Longer Home Health 

Services Will Be Required 

Sections 1814(a)(2)(C) and 

1835(a)(2)(A) of the Act require, as a 

condition of payment, that a physician 

must certify (and recertify, when home 

health services are furnished over a 

period of time) that the individual is 

eligible for home health services. The 

regulations at § 424.22(b)(2) set forth the 

content and basis for recertification 

requirements and states that the 

recertification statement must indicate 

the continuing need for services and 

estimate how much longer the services 

will be required. This requirement has 

been longstanding policy that predates 

the Paperwork Reduction Act of 1995 

requirements. Therefore, there is no 

corresponding Collection of Information 

that was submitted to the Office of 

Management and Budget (OMB) for 

review and approval for the burden 

estimate for the recertification 

requirement that the certifying 

physician must estimate how much 

longer home health services will be 

required. 

In section III.G. of this proposed rule, 

we are proposing to eliminate the 

regulatory requirement as set forth at 42 

CFR 424.22(b)(1), that the certifying 

physician, as part of the recertification 

process, include an estimate of how 

much longer home health services will 

be required at each home health 

recertification. While all other 

recertification content requirements 

under § 424.22 will remain unchanged, 

the certifying physician would not be 

required to provide his/her estimation 

as to how much longer the patient will 

require home health services on 

recertifications on and after January 1, 

2019. Therefore, we believe this would 

result in a reduction of burden for 

certifying physicians by reducing the 

amount of time physicians spend on the 

recertification process and we are 

providing an estimate on the reduction 

in burden in this proposed rule. All 

salary information is based on the May 

2017 wage data for physicians and 

surgeons from the Bureau of Labor 

Statistics (BLS) website at (https://

www.bls.gov/oes/current/ 

oes291069.htm) and includes a fringe 

benefits and overhead worth 100 

percent of the base salary. 

Using CY 2017 claims, we estimate 

that of the total number of Medicare 

home health claims (5.8 million), 37 

percent were recertifications (2.1 

million) completed by 284,615 


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111CY 2017 OASIS assessments matched to 

Medicare FFS claims (as of March 2, 2018). 

certifying physicians.111 Of those 2.1 

million recertifications, we estimate that 

the time needed to recertify patient 

eligibility will decrease by 2 minutes 

per recertification with a total reduction 

of 69,930 physician hours for all 

recertifications as a result of eliminating 

the time estimation statement. Based on 

the physician’s hourly wage of $203.26 

as described previously ($101.63 with 

100 percent fringe benefits and 

overhead), this results in an overall 

annualized cost savings of $14.2 million 

beginning in CY 2019. 

2. HHVBP Model 

Under the HHVBP Model, the first 

payment adjustment applies in CY 2018 

based on PY1 (2016) data and the final 

payment adjustment will apply in CY 

2022 based on PY5 (2020) data. In the 

CY 2016 HH PPS final rule, we 

estimated that the overall impact of the 

HHVBP Model from CY 2018 through 

CY 2022 was a reduction of 

approximately $380 million (80 FR 

68716). In the CY 2017 HH PPS final 

rule, we estimated that the overall 

impact of the HHVBP Model from CY 

2018 through CY 2022 was a reduction 

of approximately $378 million (81 FR 

76795). We do not believe the changes 

proposed in this rule would affect the 

prior estimates. 

3. Home Infusion Therapy 

a. Health and Safety Standards 

Section 5012 of the Cures Act (Pub. L. 

114–255), which amended section 

1861(s)(2) of the Social Security Act (the 

Act), established a new Medicare home 

infusion therapy benefit. Section 

1861(iii) of the Act, as added by section 

5012 of the Cures Act defines, the 

Medicare home infusion therapy benefit 

and covers professional services 

including nursing services, training and 

education, and remote monitoring and 

monitoring services associated with 

administering certain infusion drugs in 

a patient’s home. This benefit would 

ensure consistency in coverage for home 

infusion benefits for all Medicare 

beneficiaries. Section 1861(iii) of the 

Act, as added by the Cures Act, sets 

forth elements for home infusion 

therapy suppliers in three areas: (1) 

Ensuring that all patients have a plan of 

care established and updated by a 

physician that sets out the care and 

prescribed infusion therapy necessary to 

meet the patient-specific needs, (2) 

having procedures to ensure that remote 

monitoring services associated with 

administering infusion drugs in a 

patient’s home are provided, and (3) 

having procedures to ensure that 

patients receive education and training 

on the effective use of medications and 

equipment in the home. 

We propose to implement the 

following requirements for home 

infusion therapy suppliers— 

• Ensure that all patients must have 

a plan of care established by a physician 

that prescribes the type, amount and 

duration of infusion therapy services 

that are furnished. The plan of care 

would specify the care and services 

necessary to meet the patient specific 

needs. 

• Ensure that the plan of care for each 

patient is periodically reviewed by the 

physician. 

• Ensure that patients have infusion 

therapy support services at all times 

through the provision of professional 

services, including nursing services, 

furnished in accordance with the plan 

of care on a 7-day-a-week, 24-hour-a-day 

schedule. 

• Provide patient training and 

education. 

• Provide remote monitoring and 

monitoring services for the provision of 

home infusion therapy and home 

infusion drugs. 

All current standards established by 

AOs already address the proposed 

requirements set forth in this rule. 

Furthermore, all existing home infusion 

therapy suppliers are already accredited 

by an existing AO for home infusion 

therapy to meet requirements 

established by private insurers and 

Medicare Advantage plans. Therefore, 

we assume that there would be no new 

burden imposed on home infusion 

therapy suppliers in order to meet the 

proposed health and safety standards. 

Additionally, we assume that these 

proposed health and safety provisions 

would not impose a new burden on 

home infusion therapy AOs that are 

likely to apply to be Medicare approved 

AOs for home infusion therapy because 

their existing standards would already 

meet or exceed those that would be 

established in this rule. 

b. Home Infusion Therapy Payment 

We estimate that the net impact of the 

policies in this rule is approximately 

$60 million in increased Medicare 

payments to home infusion suppliers in 

CY 2019. This increase reflects the cost 

of providing infusion therapy services to 

existing DME home infusion therapy 

beneficiaries (at a 4-hour rate), as the 

temporary transitional payment applies 

only to existing Medicare qualified 

home infusion suppliers (that is, DME 

suppliers that are enrolled as 

pharmacies that provide external 

infusion pumps and supplies are 

considered eligible home infusion 

suppliers, as are potential pharmacy 

suppliers that enroll and comply with 

the Medicare program’s supplier 

standards (found at 42 CFR 424.57(c)) 

and quality standards to become 

accredited for furnishing external 

infusion pumps and supplies). Prior to 

the implementation of the temporary 

transitional payment, home infusion 

suppliers have not been separately 

reimbursed for providing these services 

under the DME benefit. For the 

temporary transitional payment we do 

not anticipate an increase in 

beneficiaries receiving home infusion 

therapy services as referral patterns are 

not likely to change significantly due to 

the inability for other provider types (for 

example, physicians, HHAs) to become 

home infusion therapy suppliers prior 

to CY 2021 and given that existing DME 

suppliers already provide home 

infusion therapy services without 

separate reimbursement. 

c. Accreditation of Quality Home 

Infusion Therapy Suppliers 

The requirement for accreditation of 

home infusion therapy suppliers will 

cause both the home infusion therapy 

AOs and the home infusion therapy 

suppliers to incur costs related to the 

accreditation process. This section 

provides a discussion of the estimated 

time and cost burdens that home 

infusion therapy suppliers may incur as 

part of the accreditation process. It also 

discusses the estimated time and cost 

burdens that may be incurred by the 

home infusion therapy AOs to comply 

with the proposed home infusion 

therapy AO approval and oversight 

regulations at §§ 488.1010 through 

488.1050. As the following discussion 

demonstrates, we have estimated that 

each home infusion therapy AO would 

incur an estimated cost burden in the 

amount of $23,258 for compliance with 

the proposed home infusion therapy AO 

approval and oversight regulations at 

§§ 488.1010 through 488.1050. 

(1) Burden Incurred by Home Infusion 

Therapy AOs 

Section 1834(u)(5)(B) of the Act 

requires the Secretary to designate AOs 

to accredit suppliers furnishing home 

infusion therapy not later than January 

1, 2021. To date, we have not solicited 

nor approved any AOs to accredit home 

infusion therapy suppliers as required 

by section 1834(u)(5)(B) of the Act. 

Therefore, in this rule we have proposed 

to publish a solicitation notice in the 

Federal Register seeking national AOs 

to accredit home infusion therapy 

suppliers. We propose to publish this 


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solicitation after the publication of the 

final rule. 

The AOs that respond to the 

solicitation notice would be required to 

submit an application to CMS 

requesting CMS-approval of a home 

infusion therapy accreditation program 

for Medicare. If CMS approves the AOs 

application, the home infusion therapy 

AO would also be required to meet, on 

an ongoing basis, the requirements set 

forth in proposed §§ 488.1010 through 

488.1050. The following is a discussion 

of the burden associated with specific 

sections of the proposed home infusion 

therapy AO approval and oversight 

regulations at §§ 488.1010 through 

488.1050. 

(a) Burden for Home Infusion Therapy 

AOs Associated With Proposed 

§ 488.1010 

The AOs that accredit home infusion 

therapy suppliers would incur time and 

costs burdens associated with the 

preparation of the application they 

submit to CMS requesting approval of 

their home infusion therapy 

accreditation program. This would 

include the preparation, gathering or 

obtaining of all the documentation 

required in proposed § 488.1010(a)(1) 

through (24). 

If the AO has never submitted an 

application to CMS, we estimate that it 

would take approximately 70 hours of 

time to gather, obtain or prepare all 

documentation required by proposed 

§ 488.1010(a)(1) through (23). However, 

for an existing AO that has previously 

submitted an application to CMS for any 

type of accreditation program, we 

estimate that it would take 

approximately 45 hours to gather, obtain 

or prepare all required documentation. 

We believe that it would take less time 

for an AO that has previously submitted 

an application to CMS to prepare an 

application requesting approval of a 

home infusion therapy accreditation 

program because this AO would already 

be familiar with the application process 

and requirements. The proposed 

application requirements for home 

infusion therapy AOs, set forth at 

§ 488.1010(a)(1) through (23), are 

consistent with those for Medicarecertified providers and suppliers which 

are set forth at § 488.5. 

The home infusion therapy AO would 

incur costs associated with the 

preparation and submission of the home 

infusion therapy accreditation program 

application. The home infusion therapy 

AO would incur costs for the wages of 

all AO staff that work on the preparation 

of the application. We estimate that the 

AO would have 2 staff work on the 

preparation of the application. We 

believe that the AO staff that works on 

the AOs application would be clinicians 

such as registered nurses or medical or 

health services manager. According to 

the U.S. Bureau of Labor Statistics, the 

mean hourly wage for a registered nurse 

is $35.36 (https://www.bls.gov/oes/ 

current/oes291141.htm) and the mean 

hourly wage for a medical or health 

services manager is $53.69 (https://

www.bls.gov/oes/current/ 

oes119111.htm)). Therefore, we estimate 

that the home infusion therapy AO 

would incur wages for 45 hours of time 

by a registered nurse and wages for 45 

hours of time by a medical or health 

services manager in the amount of 

$8,014.50 (45 hours × $35.36 per hour 

= $1,591.20) + (45 hours × $53.69 = 

$2,416.05 per hour) + ($4,007.25 for 

fringe benefits and overhead). 

As stated previously, we estimate that 

it would take approximately 70 hours 

for an AO that has never submitted an 

application before to prepare and 

submit their home infusion therapy 

accreditation program application to 

CMS. We estimate that the home 

infusion therapy AO would incur wages 

for 70 hours of time by a registered 

nurse and 70 hours of time by a medical 

or health services manager in the 

amount of $12,453 (70 hours × $35.36 

per hour = $2,475.20) + (70 hours × 

$53.59 = $3,751.30 + ($6,226,50 for 

fringe benefits and overhead). 

In addition, AOs are required to 

submit 2 hard copies of their 

application to CMS in notebooks with 

dividers and an electronic copy of their 

application on a thumb drive. Because 

of this requirement, the home infusion 

therapy AO would incur costs for the 

notebooks, dividers, thumb drive, 

photocopying, paper and ink, and 

postage costs for mailing the notebooks 

with the hard copies of the application 

to the CMS Central Office. We estimate 

that these costs would be no more than 

$250. 

At this time, there are six AOs that 

accredit home infusion therapy 

suppliers (that is—The Joint 

Commission (TJC), Accreditation 

Commission for Health Care (ACHC), 

The Compliance Team (TCT), 

Community Health Accreditation 

Partner (CHAP), Healthcare Quality 

Association on Accreditation (HQAA), 

and National Association of Boards of 

Pharmacy). The home infusion therapy 

accreditation offered by these AOs is 

offered as part of the deeming 

accreditation of a home health 

accreditation program and has not been 

approved under the requirements of 

section 1834(u)(5)(A) of the Act. 

Therefore, we are proposing that, in 

order for the home infusion therapy 

suppliers accredited by these AOs to 

continue to receive payment for the 

home infusion therapy services 

furnished to Medicare beneficiaries, 

these AOs must obtain Medicare 

approval for a home infusion therapy 

accreditation program. If all of these six 

AOs were to submit applications to 

CMS for approval of a home infusion 

therapy accreditation program, the cost 

incurred across all of these potential 

home infusion therapy AOs for the 

preparation and submission of their 

applications would be $48,087 

($4,007.25 × 6 AOs = $24,043.50) + 

($24,043.50 for fringe benefits and 

overhead). 

To obtain this CMS approval, we are 

proposing that these AOs would be 

required to submit an application to 

CMS seeking approval of a home 

infusion therapy accreditation program 

that meets the requirements set forth in 

the proposed new home infusion 

therapy AO approval and oversight 

regulations set forth at §§ 488.1010.1 

through 488.1010.24 and the proposed 

new home infusion therapy health and 

safety regulations at 42 CFR part 466, 

subpart I. We have further proposed that 

the home infusion therapy accreditation 

programs submitted to CMS for 

approval by the existing home infusion 

therapy AOs be consistent with the 

requirements of section 5102 of the 21st 

Century CURES Act and section 

1861(iii) of the Act. We would also 

require that the home infusion therapy 

programs submitted by these AOs be 

separate and distinct from the AOs 

home health deeming accreditation 

program. 

The AOs that currently provide home 

infusion therapy accreditation would 

incur the time and costs associated with 

the preparation of the CMS application 

and required supporting documentation. 

We estimate that it would take these 

AOs approximately 45 hours to prepare 

their applications and supporting 

documentation because they have 

previously submitted applications for 

approval of their home health 

accreditation programs. The existing 

AOs that accredit home infusion 

therapy suppliers would also incur costs 

for the wages for all AO staff involved 

with the preparation and submission of 

the application. The AO would also 

incur costs for printing the hard copies 

of the application, ink and paper, 

notebooks and dividers, and postage. 

(b) Burden for Home Infusion Therapy 

AOs Associated With Proposed 

§ 488.1030 

In accordance with proposed 

§ 488.1030(b) CMS would perform a 

comparability review if CMS makes 


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changes to the home infusion therapy 

AO approval and oversight regulations 

or home infusion therapy health and 

safety regulation. The purpose of the 

comparability review is to allow CMS to 

assess the equivalency of a home 

infusion therapy AO’s accreditation 

standards with the comparable 

Medicare home infusion therapy 

accreditation requirements after CMS 

imposes new or revised Medicare home 

infusion therapy accreditation 

requirements. 

Proposed § 488.1030(b)(1) would 

provide that if CMS were to make 

changes to the home infusion therapy 

AO approval and oversight accreditation 

regulations or the home infusion 

therapy health and safety regulations, 

CMS would send a written notice of the 

changes to the home infusion therapy 

AOs. Proposed § 488.1030(b)(2) would 

provide that CMS would provide a 

deadline of not less than 30 day by 

which the AO must submit its revised 

home infusion therapy accreditation 

program standards to CMS. 

Proposed § 488.1030(b)(2) would 

require the home infusion therapy AOs 

to revise their home infusion therapy 

accreditation standards so as to 

incorporate the changes made by CMS. 

The AO must submit their revised home 

infusion therapy accreditation program 

standards to CMS by the deadline 

specified in CMS’ written notice. The 

AO may submit a request for an 

extension of the submission deadline, so 

long as the request is submitted prior to 

the original submission deadline. 

The home infusion therapy AOs 

would incur a time burden associated 

with the time required for the AO staff 

to review CMS’ notice of the revisions 

to the home infusion therapy AO 

approval and oversight accreditation 

standards or home infusion therapy 

health and safety standards. We 

estimate that it would take no more than 

1 hour for the AO to review the notice 

from CMS notifying the AO of the 

changes to the AO approval and 

oversight regulations or health and 

safety regulation. 

The home infusion therapy AOs 

would incur a cost burden for the wages 

of the AO staff that are involved with 

reviewing the CMS notice and the 

preparation of the home infusion 

therapy AO’s revised accreditation 

program standards. We believe that the 

AO staff that would review the notice 

from CMS regarding changes to the CMS 

home infusion therapy regulations 

would be clinicians such as registered 

nurses. According to the U.S. Bureau of 

Labor Statistics, the mean hourly wage 

for a non-industry specific registered 

nurse is $35.36 (https://www.bls.gov/ 

oes/current/oes291141.htm). Therefore, 

the home infusion therapy AO would 

incur a cost burden in the amount of 

$70.72 for the preparation of the 

response to CMS (1 hour × $35.36 per 

hour = $35.36) + ($35.36 for fringe 

benefits and overhead). 

The home infusion therapy would 

also incur a cost burden for the wages 

of the AO staff for the time spent 

preparing the AOs revised home 

infusion therapy accreditation 

standards. However, we are unable to 

accurately estimate this cost because the 

amount of wages incurred would be 

dependent on the amount of time spent 

by the AO staff preparing the AOs 

revised accreditation standards. 

We believe that the AO staff that 

would prepare the home infusion 

therapy AOs revised home infusion 

therapy accreditation standards would 

be a clinician such as registered nurses. 

According to the U.S. Bureau of Labor 

Statistics, the mean hourly wage for a 

non-industry specific registered nurse is 

$35.36 (https://www.bls.gov/oes/ 

current/oes291141.htm). If we were to 

estimate that it would take 5 hours for 

the home infusion therapy AO to 

prepare the revised home infusion 

therapy accreditation standards, the 

estimated cost burden to the AO would 

be $353.60 (5 hours × $35.36 per hour 

= $176.80) + ($176.80 for fringe benefits 

and overhead). 

At this time, there are six AOs that 

accredit home infusion therapy 

suppliers (that is—The Joint 

Commission (TJC), Accreditation 

Commission for Health Care (ACHC), 

The Compliance Team (TCT), 

Community Health Accreditation 

Partner (CHAP), Healthcare Quality 

Association on Accreditation (HQAA), 

and National Association of Boards of 

Pharmacy). The home infusion therapy 

accreditation offered by these AOs is 

offered as part of the deeming 

accreditation of a home health 

accreditation program and has not been 

approved under the requirements of 

section 1834(u)(5)(A) of the Act. If all of 

these six AOs were to submit 

applications to CMS for approval of a 

home infusion therapy accreditation 

program, the cost incurred across all of 

these AOs for the preparation of revised 

accreditation standards would be 

$2,121.60 ($176.80 × 6 AOs = $1,060.80) 

+ ($1,060.80 for fringe benefits and 

overhead). 

As provided by proposed 

§ 488.1030(b)(4), a home infusion 

therapy AO may request an extension of 

the deadline by which they must submit 

their revised accreditation home 

infusion therapy standards, so long as 

the extension request is submitted prior 

to the submission deadline. If the home 

infusion therapy AO requested an 

extension of the submission deadline, 

the AO would incur burden for the time 

required to prepare and submit the 

deadline extension request, however, 

we believe this burden would be 

minimal. We believe that the extension 

request could be sent in the form of an 

email to CMS, would consist of no more 

than a few paragraphs and would take 

no more than 15 minutes to prepare and 

send. 

The AO would incur a cost burden for 

the wages for the AO staff who prepares 

the extension request. We believe that 

this email would be sent by an 

administrative assistant. According to 

the U.S. Bureau of Labor Statistics, the 

mean hourly wage for an executive 

administrative assistant is $28.56 

(https://www.bls.gov/oes/current/ 

oes436011.htm). We estimate that the 

AO would incur a cost burden for wages 

related to the preparation and sending 

of the extension request to CMS in the 

amount of $14.28. ($28.56 × 15 minutes 

= $7.14) + ($7.14 for fringe benefits and 

overhead). 

At this time, there are six AOs that 

accredit home infusion therapy 

suppliers (that is—The Joint 

Commission (TJC), Accreditation 

Commission for Health Care (ACHC), 

The Compliance Team (TCT), 

Community Health Accreditation 

Partner (CHAP), Healthcare Quality 

Association on Accreditation (HQAA), 

and National Association of Boards of 

Pharmacy). If all of these six AOs were 

to submit applications to CMS for 

approval of a home infusion therapy 

accreditation program, they could 

become CMS-approved home infusion 

therapy AOs. It is unlikely that all of the 

AOs would submit a request for an 

extension of the deadline to submit their 

revised accreditation standards to CMS. 

However, if this were to occur, the cost 

incurred across all of these AOs for the 

preparation of the extension requests by 

each home infusion therapy AO would 

be $85.68 ($7.14 × 6 AOs = $42.84) + 

($42.84 for fringe benefits and 

overhead). 

Proposed § 488.1030(b)(7) would 

provide that if CMS were to make 

significant substantial changes to the 

home infusion therapy AO approval and 

oversight accreditation standards or the 

home infusion therapy health and safety 

standards, we may require the home 

infusion therapy AOs to submit a new 

application for approval of their revised 

home infusion therapy accreditation 

programs. If this were to occur, the 

home infusion therapy AOs would incur 

a time burden for the time associated 


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the preparation of the AOs new 

application. 

We estimate that it would take the 

home infusion therapy AO 

approximately 45 hours to prepare and 

submit their new application to CMS. 

This would include the time and costs 

required to gather and prepare the 

required supporting documentation to 

go with the application. We believe that 

the home infusion therapy AOs would 

already be familiar with the CMS 

application process and would be able 

to use their previous application and 

supporting documentation with 

updates, therefore, the reapplication 

process would be less burdensome. 

The home infusion therapy AO would 

also incur costs associated with the 

preparation and submission of a new 

application. The home infusion therapy 

AO would incur costs for the wages of 

all AO staff that work on the preparation 

of the application. We estimate that the 

AO would have 2 staff persons work on 

the preparation of the application. 

Furthermore, we believe that the AO 

staff that works on the AOs application 

would be clinicians such as a registered 

nurse and a medical or health services 

manager. According to the U.S. Bureau 

of Labor Statistics, the mean hourly 

wage for a non-industry specific 

registered nurse is $35.36 ((https://

www.bls.gov/oes/current/ 

oes291141.htm). and the mean hourly 

wage for a medical or health services 

manager is $53.69 ((https://

www.bls.gov/oes/current/ 

oes119111.htm). Therefore, we estimate 

that the home infusion therapy AO 

would incur wages for 45 hours of time 

by a registered nurse and 45 hours of 

time by a medical or health services 

manager in the amount of $$8,014.50 

(45 hours × $35.36 per hour = $1,591.20) 

+ (45 hours × $53.69 = $2,416.05 per 

hour) + ($4,007.25 for fringe benefits 

and overhead). The cost across all the 6 

potential home infusion therapy AOs 

would be $48,087 ($4007.25 × 6 AOs = 

$24,043.50) + ($24,043.50 for fringe 

benefits and overhead). 

In addition, AOs are required to 

submit 2 hard copies of their 

application to CMS in notebooks with 

dividers and an electronic copy of their 

application on a thumb drive. Because 

of this requirement, the home infusion 

therapy AO would incur costs for the 

notebooks, dividers, thumb drive, 

photocopying, paper and ink, and 

postage costs for mailing the notebooks 

with the hard copies of the application 

to the CMS Central Office. We estimate 

that these costs would be no more than 

$250. 

In accordance with proposed 

§ 488.1030(c), CMS will perform a 

standards review when the home 

infusion therapy AO makes updates to 

its accreditation standards and surveys 

processes. Proposed § 488.1030(c)(1) 

would require that when a home 

infusion therapy AO proposes to adopt 

new or revised accreditation standards, 

requirements or changes in its survey 

process, the home infusion therapy AO 

must submit its revised accreditation 

standards and survey processes to CMS 

for review, at least 60 days prior to the 

proposed implementation date of the 

revised standards. Proposed 

§ 488.1030(c)(3) would require that the 

home infusion therapy AO provide CMS 

with a detailed description of the 

changes that are to be made to the AO’s 

home infusion therapy accreditation 

standards, requirements and survey 

processes and a detailed crosswalk (in 

table format) that states the exact 

language of the organization’s revised 

accreditation requirements and the 

applicable Medicare requirements for 

each. Proposed § 488.1030(c)(4) would 

provide that CMS must provide a 

written notice to the home infusion 

therapy accrediting organization which 

states whether the home infusion 

therapy accreditation program, 

including the proposed revisions, 

continues or does not continue to meet 

or exceed all applicable Medicare home 

infusion therapy requirements within 60 

days of receipt of the home infusion 

therapy accrediting organization’s 

proposed changes. Proposed 

§ 488.1030(c)(5) would provide that if a 

home infusion therapy AO implements 

changes that have neither been 

determined nor deemed by CMS to be 

comparable to the applicable Medicare 

home infusion therapy requirements, 

CMS may open a home infusion therapy 

accreditation program review in 

accordance with proposed 

§ 488.1030(c)(d). 

The burden to the home infusion 

therapy AO associated with the 

standards review includes the time 

required for the home infusion therapy 

AO to prepare its revised accreditation 

standards and detailed crosswalk for 

submission to CMS and submit them to 

CMS for review. This burden would also 

include the time required for the AO 

staff to read and respond to CMS’ 

written response. It is important to note 

that we do not include in our burden 

estimate the time that would be spent by 

the home infusion therapy AO in 

making voluntary revisions to their 

accreditation standards that are not 

required by CMS nor prompted by a 

regulatory change. 

The home infusion therapy AO would 

also incur costs for the wages of the AO 

staff involved with the preparation of 

the AO’s revised home infusion therapy 

accreditation standards and the detailed 

crosswalk for submission to CMS. The 

AO would also incur costs for wages for 

the time the AO staff spent reviewing 

CMS’ response. However, the AO could 

send their revised accreditation 

standards to CMS via email, therefore 

the AO would not incur costs for 

postage. 

We are not able to accurately estimate 

the total time and cost burden 

associated with the standards review 

because the time required for the home 

infusion therapy AO to prepare its 

revised home infusion therapy 

accreditation standards and detailed 

crosswalk would depend on the extent 

of the revision the AO has made to its 

home infusion therapy accreditation 

standards or survey processes. The 

burden would also depend of the 

content and length of CMS’ response 

letter. However, we do estimate that the 

preparation of the home infusion 

therapy AOs revised accreditation 

standard and detailed crosswalk for 

submission to CMS would take no less 

than 5 hours. 

We believe that the AO staff that 

would prepare the home infusion 

therapy AOs revised home infusion 

therapy accreditation standards and 

detailed crosswalk for submission to 

CMS would be clinicians such as 

registered nurses. According to the U.S. 

Bureau of Labor Statistics, the mean 

hourly wage for a non-industry specific 

registered nurse is $35.36 (https://

www.bls.gov/oes/current/ 

oes291141.htm). Therefore, if we were 

to estimate that this task would take 5 

hours to complete, the cost burden to 

the home infusion therapy would be 

$353.60 (5 hours × $35.36 per hour = 

$176.80) + ($176.80 for fringe benefits 

and overhead). 

We further estimate that it would take 

the home infusion therapy AO 

approximately 30 minutes for the home 

infusion therapy AO to review the CMS 

response to their submission of the 

revised home infusion therapy 

accreditation standards and detailed 

crosswalk. We believe that a clinician 

such as a registered nurse would review 

the CMS response letter. Therefore, the 

cost burden to the home infusion 

therapy AO associated with this task 

would be $ 53.04 (45 minutes × $35.36 

per hour = $26.52) + ($26.52 for fringe 

benefits and overhead). 

It is important to note that we have 

not calculated this burden across all of 

the potential home infusion therapy 

AOs. We have not done so because the 

submission of revised home infusion 

therapy accreditation standards by a 

home infusion therapy AO would only 


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occur on an occasional basis and would 

never be done by all 6 potential AOs at 

the same time. 

In accordance with proposed 

§ 488.1030(d), CMS may perform a 

home infusion therapy accreditation 

program review if a comparability, 

performance, or standards review 

reveals evidence of substantial noncompliance of a home infusion therapy 

AO’s CMS-approved home infusion 

therapy accreditation program with the 

requirements of the proposed home 

infusion therapy AO approval and 

oversight regulation at 42 CFR part 488, 

subpart L. If a home infusion therapy 

accreditation program review is 

initiated, CMS will provide written 

notice to the home infusion therapy AO 

indicating that its CMS-approved 

accreditation program approval may be 

in jeopardy and that a home infusion 

therapy accreditation program review is 

being initiated. The notice would 

provide all of the following information: 

• A statement of the instances, rates 

or patterns of non-compliance 

identified, as well as other related 

information, if applicable. 

• A description of the process to be 

followed during the review, including a 

description of the opportunities for the 

home infusion therapy accrediting 

organization to offer factual information 

related to CMS’ findings. 

• A description of the possible 

actions that may be imposed by CMS 

based on the findings of the home 

infusion therapy accreditation program 

review. 

• The actions the home infusion 

therapy accrediting organization must 

take to address the identified 

deficiencies. 

• A timeline for implementation of 

the home infusion therapy accrediting 

organization’s corrective action plan, 

not to exceed 180 calendar days after 

receipt of the notice that CMS is 

initiating a home infusion therapy 

accreditation program review. 

Proposed § 488.1030(d)(3) would 

provide that CMS will monitor the 

performance of the AO’s home infusion 

therapy and the implementation of the 

corrective action plan during a 

probation period of up to 180 days. 

Proposed § 488.1030(d)(4) would 

provide that if CMS determines, as a 

result of the home infusion therapy 

accreditation program review or a 

review of an application for renewal of 

the accrediting organizations existing 

CMS-approved home infusion therapy 

accreditation program, that the home 

infusion therapy accrediting 

organization has failed to meet any of 

the requirements of the proposed 

regulations at §§ 488.1010 through 

488.1050, CMS may place the home 

infusion therapy AO’s CMS-approved 

home infusion therapy accreditation 

program on an additional probation 

period of up to 180 calendar days 

subsequent to the period described in 

§ 488.1030(d)(1)(iv). 

The time burden associated with the 

home infusion therapy accreditation 

program review includes the time 

burden associated with the AO’s review 

of CMS’ written notice which indicates 

that the home infusion therapy AO’s 

CMS-approved accreditation program 

approval may be in jeopardy and that a 

home infusion therapy accreditation 

program review is being initiated. The 

time required for the review of the CMS 

letter will depend on the length of CMS’ 

finding. However, we estimate it would 

take no more than 60 minutes to review 

this letter. 

The AO would incur costs for the 

wages of the AO staff who performs the 

review of the CMS letter. We believe 

that an AO staff person with a clinical 

background such as a registered nurse 

would review the CMS letter. According 

to the U.S. Bureau of Labor Statistics, 

the mean hourly wage for a registered 

nurse is $35.36 (https://www.bls.gov/ 

oes/current/oes291141.htm). Therefore, 

we estimate that the cost burden to the 

home infusion therapy AO associated 

with the review of the CMS letter would 

be approximately $70.72 (1 hour × 

$35.36 = $35.36) + ($35.36 for fringe 

benefits and overhead). 

There is further burden associated 

with the requirement that the AO 

prepare and submit a written response 

to the CMS letter and a corrective action 

plan. However, we are unable to 

accurately estimate the time burden 

associated with this task because the 

amount of time required for the home 

infusion therapy AO to prepare the 

response letter and corrective plan 

would be dependent on the number and 

type of findings identified in CMS’ 

letter. 

However, we believe that an AO staff 

person with a clinical background such 

as a registered nurse would prepare the 

home infusion therapy AO’s written 

response to the CMS letter and a 

corrective action plan. According to the 

U.S. Bureau of Labor Statistics, the 

mean hourly wage for a registered nurse 

is $35.36 (https://www.bls.gov/oes/ 

current/oes291141.htm). If we were to 

estimate that it would take the home 

infusion therapy AO 3 hours to prepare 

and submit a written response to the 

CMS letter and a corrective action plan, 

the estimated cost burden to the home 

infusion therapy AO associated with 

this task would be $212.16 (3 hours × 

$35.36 = $106.08) + ($106.08 for fringe 

benefits and overhead). Proposed 

§ 488.1030(d)(2) provides that CMS 

would review and approve the AO’s 

plan of correction within 30 days of 

receipt. If CMS requires the home 

infusion therapy AO to make changes to 

their corrective action plan as a 

condition of approval, the AO would 

incur burden for the time required to 

make the required revisions to their 

plan of correction and resubmit it to 

CMS. 

The home infusion therapy AO would 

incur a time burden for the time spent 

by the AO staff making corrections to 

the AOs corrective action plan. We are 

unable to accurately estimate how long 

it would take for the AO to revise its 

corrective action plan because the 

revision to be made to the corrective 

action plan would be dependent on the 

extent of the correction requested by 

CMS. 

However, we believe that an AO staff 

person with a clinical background such 

as a registered nurse would make the 

corrections to the AOs corrective action 

plan. According to the U.S. Bureau of 

Labor Statistics, the mean hourly wage 

for a registered nurse is $35.36 (https:// 

www.bls.gov/oes/current/ 

oes291141.htm). So, if we were to 

estimate that it would take the home 

infusion therapy AO 2 hours to prepare 

and submit a written response to the 

CMS letter and make any necessary 

revision to the corrective action plan, 

the estimated cost burden to the home 

infusion therapy AO associated with 

this task would be $141.44 (2 hours × 

$35.36 per hour = $70.72) + ($70.72 for 

fringe benefits and overhead). During 

the 180 day probationary period, CMS is 

likely to require the home infusion 

therapy AO to submit periodic progress 

reports and participate in periodic 

telephone to monitor the home infusion 

therapy AOs progress. The home 

infusion therapy AO would incur 

burden for the time required to prepare 

and submit an initial progress report. 

We estimate that the initial progress 

report would take approximately one 

hour to prepare. We further estimate 

that the burden associated with the 

preparation and submission of 

subsequent progress reports would be 

less than that for the initial progress 

report because the AO would be able to 

modify or update their initial or 

previous progress report. We estimate 

that it would take approximately 1 hour 

for the AO staff to prepare the initial 

progress report and 30 minutes for the 

AO staff to prepare subsequent progress 

reports. If CMS were to require the AO 

to submit one progress report per month 

during the entire 180 day probation 

period (6 months), the AO would have 


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to submit 1 initial progress report and 

5 subsequent progress reports. 

Therefore, we estimate that the AO 

would incur a time burden in the 

amount of 3.5 hours for the submission 

of all progress reports during the 180 

day probation period. The AO would 

also incur a cost burden for the wages 

of the AO staff person who is involved 

in the preparation and submission of the 

progress reports. We believe that the 

initial and subsequent progress reports 

would be prepared by person with a 

clinical background such as a registered 

nurse. According to the U.S. Bureau of 

Labor Statistics, the mean hourly wage 

for a registered nurse is $35.36 (https:// 

www.bls.gov/oes/current/ 

oes291141.htm). We estimate that the 

home infusion therapy AO would incur 

a cost burden in the amount of $247.52 

for the preparation of the progress 

reports during the 180 day probation 

period ($3.5 hours × 35.36 per hour = 

$123.76) + ($123.76 for fringe benefits 

and overhead). 

The home infusion therapy AO would 

also incur burden associated with the 

time required to participate in the 

periodic phone calls with CMS. We are 

not able to accurately estimate the 

amount of time that would be required 

for these periodic phone calls because 

we do not know how often the AO 

would be required to participate in 

phone calls with CMS or how long these 

phone calls would last. However, we do 

not believe that these phone calls would 

be held more often that monthly or last 

more than one hour. The AO would 

incur costs for the wages of all AO staff 

that participate in the periodic 

telephone calls. We are not able to 

accurately estimate the total cost burden 

for wages that would be incurred by the 

home infusion therapy AO at this time, 

because we do not know who from the 

AO would be attending these meetings. 

If we were to estimate that these 

phone calls were to be held on a 

monthly basis during the 180 day 

probation period for a period of one 

hour period per call, the home infusion 

therapy AO would incur a time burden 

in the amount of 6 hours per each staff 

member that participates in these phone 

calls. We believe that the AO would 

have a minimum of 3 staff that are 

clinicians, such as registered nurses, 

participate on the call. According to the 

U.S. Bureau of Labor Statistics, the 

mean hourly wage for a registered nurse 

is $35.36 (https://www.bls.gov/ooh/ 

healthcare/registered-nurses.htm). 

Therefore, the cost burden to the home 

infusion therapy AO for participation in 

the monthly telephone calls would be 

$1,272.96 ((3 AO staff × $35.36 per hour 

= $106.08 per call per all staff/$106.08 

per call per all staff × 6 calls = $636.48 

total wages per all staff per all calls) + 

($636.48 for fringe benefits and 

overhead)). 

At or near the end of the first 180 day 

probationary period, CMS will make a 

decision as to whether the home 

infusion therapy AO has successfully 

come into compliance with the home 

infusion therapy regulations, or whether 

the AO has failed to do so. Proposed 

§ 488.1030(d)(4) would provide that if 

CMS finds that the home infusion 

therapy AO has failed to properly 

implement the plan of correction and 

come into compliance with the 

requirements of the proposed home 

infusion therapy AO approval and 

oversight regulation or the proposed 

home infusion therapy health and safety 

regulations, CMS may place the home 

infusion therapy AO’s on an additional 

probation period of up to 180 calendar 

days. If this were to occur, the AO 

would incur the same or similar time 

and cost burdens as in the initial 180 

day probationary period. (See previous 

estimates for the estimated time and 

cost burden associated with the 180-day 

probationary period). 

It is important to note that we have 

not calculated the burden associated 

with the tasks required of the home 

infusion therapy AO under 

§ 488.1030(d) across all of the potential 

home infusion therapy AOs. We have 

not done so because the act of CMS 

placing a home infusion therapy AO on 

an accreditation program review would 

only occur on a sporadic and as needed 

basis. There would never be a situation 

in which all 6 potential AOs would be 

under an accreditation program review 

at the same time. 

(c) Burden for Home Infusion Therapy 

AOs Associated With Proposed 

§ 488.1035 

Proposed § 488.1035 titled ‘‘Ongoing 

responsibilities of a CMS-approved 

home infusion therapy accrediting 

organization’’ would require that the 

home infusion therapy AO carry out 

certain activities and submit certain 

documents to CMS on an ongoing basis. 

Proposed § 488.1035(a) would require 

the home infusion therapy AO to submit 

the following documents to CMS: (1) 

Copies of all home infusion therapy 

accreditation surveys, together with any 

survey-related information that CMS 

may require (including corrective action 

plans and summaries of findings with 

respect to unmet CMS requirements); (2) 

notice of all accreditation decisions; (3) 

notice of all complaints related to 

providers or suppliers; (4) information 

about all home infusion therapy 

accredited suppliers against which the 

home infusion therapy accreditation 

organization has taken remedial or 

adverse action, including revocation, 

withdrawal, or revision of the providers 

or suppliers accreditation; (5) the home 

infusion therapy accrediting 

organization must provide, on an annual 

basis, summary data specified by CMS 

that relate to the past year’s 

accreditation activities and trends; (6) 

notice of any proposed changes in the 

home infusion therapy accrediting 

organization’s accreditation standards or 

requirements or survey process. 

We believe that there would be little 

burden associated with this 

requirements for several reasons. First, 

while the home infusion therapy AOs 

would be required to provide copies of 

all survey reports and any surveyrelated information that CMS may 

require, the AOs would only be required 

to provide this information upon 

request. CMS may not request the home 

infusion therapy AO to submit this 

information if there are no compliance 

concerns. Second, we believe the home 

infusion therapy AO would keep these 

records in the normal course of their 

business as a home infusion therapy AO 

and would store the survey records in 

electronic format. As the AO already has 

this information prepared and stored in 

an electronic format, it would place 

little if any burden on the home 

infusion therapy AO to provide this 

information to CMS. We believe that the 

AO could send this information to CMS 

via email and attach the survey record 

electronic files to the email. 

We estimate that it would take 

approximately 30 minutes to locate the 

required survey information files and 

approximately 15 minutes for the AO 

staff to prepare an email to CMS and 

attach the electronic files to the email. 

We believe that the person at the AO 

that would prepare the email sending 

the survey information to CMS would 

most likely be a clinician such as a 

registered nurse. According to the U.S. 

Bureau of Labor Statistics, the mean 

hourly wage for a registered nurse is 

$35.36 (https://www.bls.gov/ooh/ 

healthcare/registered-nurses.htm). 

Therefore, the cost burden to the home 

infusion therapy AO associated with the 

preparation and submission of the 

survey reports and information to CMS 

would be $53.04 (30 minutes to locate 

information requested by CMS × $35.36 

per hour = $17.68) + (15 minutes × 

$35.36 = $8.84) + ($26.52 for fringe 

benefits and overhead). The estimated 

cost across the potential 6 home 

infusion therapy AOs for these tasks 

would be $318.24 ($53.04 × 6 home 

infusion therapy AOs = $318.24). 


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Proposed § 488.1035(a)(2) would 

require the home infusion therapy AO 

to provide CMS with notice of all 

accreditation decisions made for each 

home infusion therapy supplier that 

files an application for accreditation. 

This would consist of a list of each 

home infusion therapy supplier that had 

filed an application with the home 

infusion therapy AO for accreditation 

and the accreditation decision made by 

the AO. 

We believe that these accreditation 

decisions would be made by the AO in 

the normal course of the AOs business 

of performing accreditation of home 

infusion therapy suppliers. We further 

believe that there would be little burden 

associated with the requirement that the 

AO provide CMS with a list of the 

accreditation decisions made by the AO 

as this is information that would be 

readily available to the AO and that 

could quickly and easily be provided to 

CMS via email. We estimate that it 

would take approximately 15 minutes 

for the home infusion AO to gather the 

required accreditation decision 

information in preparation for sending it 

to CMS. 

We believe that this information can 

be sent to CMS via email and estimate 

that it would take an additional 15 

minutes for the AO staff to prepare an 

email to CMS and attach the electronic 

files containing the accreditation 

decision information to the email. We 

believe that the person at the AO who 

would prepare the accreditation 

decision information and prepare the 

email to CMS would most likely be a 

clinician such as a registered nurse. 

According to the U.S. Bureau of Labor 

Statistics, the mean hourly wage for a 

registered nurse is $35.36 (https://

www.bls.gov/oes/current/ 

oes291141.htm). Therefore, the 

estimated cost burden to the home 

infusion therapy AO associated with the 

preparation and submission of the 

survey reports and information to CMS 

would be $35.36 (15 minutes × $35.36 

per hour = $8.84) and (15 minutes × 

$35.36 = $8.84) + ($17.68 for fringe 

benefits and overhead). The estimated 

cost across the potential 6 home 

infusion therapy AOs for these tasks 

would be $212.16 ($35.36 × 6 home 

infusion therapy AOs = $212.16). 

Section 488.1035(a)(3) would require 

the AO to report complaint information 

to CMS. Complaint information is 

typically reported to CMS by other AOs 

by email on a monthly basis for the 

previous month. The contents of the 

complaint information reported to CMS 

would depend on whether the AO had 

received any complaints during the 

previous month. For example, if the AO 

received no complaint during the 

previous month, this email could 

consist of a sentence stating that the AO 

had received no complaints. If the AO 

had received one or more complaints 

during the previous month, the AO 

would be required to provide 

information about the nature of each 

complaint, a description of the 

investigation performed, a description 

of how the complaint was resolved and 

the date resolved. 

We believe that there would be little 

burden associated with the reporting of 

complaint information by the home 

infusion therapy AO to CMS for several 

reasons. First, we estimate that the 

home infusion therapy AOs will rarely 

receive complaints about their 

accredited home infusion therapy 

suppliers. Second, we believe that the 

home infusion therapy AO will store 

information about any complaints 

received in an electronic format. 

Therefore, complaint information can be 

reported by the home infusion therapy 

AO to CMS via email. We estimate that 

the preparation of the complaint 

information email would take only no 

more than 15 minutes to prepare and 

send. 

We believe that the person at the AO 

who would prepare the complaint 

information email and sent it to CMS 

would most likely be a clinician such as 

a registered nurse. According to the U.S. 

Bureau of Labor Statistics, the mean 

hourly wage for a registered nurse is 

$35.36 (https://www.bls.gov/oes/ 

current/oes291141.htm) Therefore, the 

estimated monthly cost burden to the 

home infusion therapy AO associated 

with the submission of complaint 

information to CMS would be $17.68 

(15 minutes × $35.36 per hour = $8.84) 

+ ($8.84 for fringe benefits and 

overhead). The estimated yearly burden 

to the home infusion therapy AO for 

this task would be $212.16 ($17.68 per 

month × 12 months per year = $212.16 

per year). 

The estimated monthly cost across the 

potential 6 home infusion therapy AOs 

for these tasks would be $106.08 ($17.68 

× 6 home infusion therapy AOs = 

$106.08). The estimated yearly cost 

across the 6 potential home infusion 

therapy AOs would be $1,272.96 

($17.68 × 6 AOs = $106.08 per all AOs 

per month/$106.08 per year × 12 

months per year = $1,272.96. Proposed 

§ 488.1035(a)(4) would require the AO 

to provide CMS with information about 

all home infusion therapy accredited 

suppliers against which the home 

infusion therapy AO has taken remedial 

or adverse action, including revocation, 

withdrawal, or revision of the providers 

or suppliers accreditation. The 

information to be sent to CMS would 

simply consist of a list of the home 

infusion therapy suppliers and the type 

of remedial or adverse action taken. 

We expect that when a home infusion 

therapy AO takes remedial or adverse 

action against its accredited supplier, 

the AO would prepare documentation 

which states the action taken and the 

reason this action was taken. We further 

believe that the AO would store this 

information electronically. This would 

enable the AO to send the required 

information to CMS via email. 

Therefore, we believe that there would 

be little burden associated with this 

requirement. 

We believe that the home infusion 

therapy AOs could send information 

about adverse or remedial actions they 

have taken against their accredited 

suppliers via email. We estimate that it 

would take approximately 30 minutes 

for a home infusion therapy AO to 

prepare a report about the adverse or 

remedial actions taken against its 

accredited suppliers and approximately 

15 minutes to prepare an email to CMS, 

attach the electronic file with the 

required information and send it to 

CMS. The home infusion therapy AOs 

would be required to report this 

information to CMS on a monthly basis. 

The AO would incur a cost burden for 

the wages of the AO staff for the time 

spent preparing the report of the adverse 

or remedial action taken against the 

AO’s accredited home infusion therapy 

suppliers and the time spent preparing 

the email to CMS. We believe that the 

person at the AO who would prepare 

the report of adverse or remedial action 

taken and prepare the email to CMS 

would most likely be a clinician such as 

a registered nurse. According to the U.S. 

Bureau of Labor Statistics, the mean 

hourly wage for a registered nurse is 

$35.36 (https://www.bls.gov/oes/ 

current/oes291141.htm). Therefore, the 

estimated cost monthly cost burden to 

the home infusion therapy AO 

associated with the submission of 

information about the adverse or 

remedial action taken by the home 

infusion therapy AO against its 

accredited home infusion therapy 

suppliers to CMS would be $53.04 (30 

minutes × $35.36 per hour = $17.68 + 

(15 minutes × $35.36 per hour = $8.84) 

+ ($26.52 for fringe benefits and 

overhead). The estimated yearly cost 

burden to the home infusion therapy 

AO for this task would be $636.48 

($53.04 per month × 12 months per year 

= $636.48 per year). 

The estimated monthly cost across the 

potential 6 home infusion therapy AOs 

for these tasks would be $318.24 ($53.04 

× 6 home infusion therapy AOs = 


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$318.24). The estimated yearly cost 

across the 6 potential home infusion 

therapy AOs would be $3,818.88 

($53.04 × 6 AOs = $318.24 per all AOs 

per month/$318.24 per year × 12 

months per year = $3,818.88. 

Proposed § 488.1035(a)(5) would 

require the home infusion therapy 

accrediting organization to provide, on 

an annual basis, summary data specified 

by CMS that relates to the past year’s 

accreditation activities and trends. This 

summary data might include 

information such as the total number of 

complaints received during the year, the 

total number of immediate jeopardy 

situations found during the year, and 

the total number of deficiencies cited. 

We believe this is information that the 

AO would collect and document 

throughout the year in the normal 

course of business. We further believe 

that the home infusion therapy AO 

would prepare this year end summary 

data for their own informational, quality 

improvement, and research purposes. 

We believe that there would be little, 

if any time burden associated with the 

submission of the documents and 

information required by proposed 

§ 488.1035(a)(5) by the home infusion 

therapy AOs to CMS, because these are 

documents which the AO would keep in 

the normal course of business, therefore 

these documents would be easily 

accessible to the home infusion therapy 

AO. Title 5 CFR 1320.3(b)(2) states that 

the time, effort, and financial resources 

necessary to comply with a collection of 

information that would be incurred in 

the normal course of their activities (for 

example in compiling and maintaining 

business records) will be excluded from 

the burden if the agency demonstrates 

that the reporting, recordkeeping, or 

disclosure activities needed to comply 

are usual and customary. Further, we 

believe that most, if not all of the home 

infusion therapy AOs would store these 

documents electronically and would be 

able to send them electronically to CMS 

via email. 

The home infusion therapy AO would 

incur a time burden for the preparation 

and submission of the annual summary 

data to CMS. We estimate that it would 

take approximately 60 minutes for the 

home infusion therapy AO to locate the 

required annual summary data 

information and prepare it for 

submission to CMS. We further estimate 

that it would take an additional 15 

minutes to prepare an email to CMS and 

attach the electronic files containing the 

summary data. 

The home infusion therapy AO would 

incur a cost burden for the wages of the 

AO staff who prepares that summary 

data for submission to CMS and 

prepares the email to in which the 

annual summary data are submitted to 

CMS. We believe that the person at the 

AO who would prepare the summary 

data for submission to CMS and also 

prepare the email to CMS would most 

likely be a clinician such as a registered 

nurse. According to the U.S. Bureau of 

Labor Statistics, the mean hourly wage 

for a registered nurse is $35.36 (https:// 

www.bls.gov/oes/current/ 

oes291141.htm). Therefore, the 

estimated cost burden to the home 

infusion therapy AO associated with the 

submission of summary data to CMS 

would be $88.40 (60 minutes × $35.36 

per hour = $35.36) + (15 minutes × 

$35.36 per hour = $8.84) + ($44.20 for 

fringe benefits and overhead). The 

estimate cost burden across the 6 

potential home infusion therapy AOs for 

this task would be $530.40 ($88.40 × 6 

potential home infusion therapy AOs = 

$530.40). 

Proposed § 488.1035(b) would require 

that within 30 calendar days after a 

change in CMS requirements, the home 

infusion therapy accrediting 

organization must submit an 

acknowledgment of receipt of CMS’ 

notification to CMS. The time burden 

associated with this requirement would 

be the time required for an AO staff 

person to review the notification from 

CMS about the change in home infusion 

therapy accreditation program 

requirements and the time required for 

the AO staff person to compose and 

send an acknowledgement email to 

CMS. 

We estimate the time required for the 

AO staff to review the notice of a change 

in CMS requirements would be 1 hour. 

We further estimate that the time that 

would be required to prepare and 

submit the acknowledgement of receipt 

of the CMS notice would be 

approximately 15 minutes because this 

notice could be sent to CMS via email 

and would only consist of 1–2 

paragraphs. 

The home infusion therapy AO would 

incur a cost burden for the wages of the 

staff for the time required to review the 

notice from CMS of the change in CMS 

requirements. The home infusion 

therapy AO would incur a cost burden 

for the wages of the staff for the time 

required to prepare the 

acknowledgement and submits it to 

CMS. We believe that the person at the 

AO who would prepare the email to 

CMS acknowledging receipt of the CMS 

notice would most likely be a clinician 

such as a registered nurse. According to 

the U.S. Bureau of Labor Statistics, the 

mean hourly wage for a registered nurse 

is $35.36 (https://www.bls.gov/oes/ 

current/oes291141.htm). 

The estimated cost burden to the 

home infusion therapy AO associated 

with the review of the notice from CMS 

of changes to the CMS requirements 

would be $70.72 (1 hour × $35.36 per 

hour) + ($35.36 for fringe benefits and 

overhead). The estimated cost burden 

associated with the preparation and 

submission of the acknowledgement by 

the home infusion therapy AO would be 

$17.68 (15 minutes × $35.36 per hour = 

$8.84) + ($8.84 for fringe benefits and 

overhead). The estimates cost across the 

6 potential home infusion therapy AOs 

would be $530.40 ($70.72 × 6 = $424.32) 

+ ($17.68 × 6 = $106.08). 

It is important to note that the home 

infusion therapy AOs would only have 

to perform these tasks if CMS were to 

make a change to the home infusion 

therapy standards. We believe that this 

would occur on an infrequent basis, 

therefore, the home infusion therapy 

AOs would incur these time and cost 

burdens on an infrequent basis. 

Proposed § 488.1035(c) would require 

that the home infusion therapy AO 

permit its surveyors to serve as 

witnesses if CMS takes an adverse 

action based on accreditation findings. 

An example in which a surveyor would 

be needed to testify as a witness would 

be if there was litigation about CMS’ 

termination of a home infusion therapy 

supplier’s participation in the Medicare 

program and the surveyor that had 

performed a survey of that home 

infusion therapy supplier was needed to 

testify about the survey findings. The 

burden associated with this requirement 

would be the time the surveyor spent 

providing testimony, any travel 

expenses the home infusion therapy AO 

would be responsible to pay, and the 

wages paid to the surveyor during the 

time spent giving testimony. 

The home infusion therapy AO would 

incur a time burden for the time 

required for the AO’s surveyor to serve 

as a witness. This would include travel 

time to and from the location where the 

hearing is being held. The AO would 

also incur cost burdens for the wages 

paid to the surveyor during the time 

they are serving as a witness and also 

for any travel expenses the AO may be 

required to pay, that are not reimbursed. 

It is important to note that the home 

infusion therapy AO surveyors would 

rarely, if ever, be required to act as a 

witness. Therefore, this is a burden that 

the home infusion therapy AOs would 

not be likely to incur. 

Proposed § 488.1035(d) would require 

that, within 2 business days of 

identifying a deficiency of an accredited 

home infusion therapy supplier that 

poses immediate jeopardy to a 

beneficiary or to the general public, the 


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home infusion therapy AO must provide 

CMS with written notice of the 

deficiency and any adverse action 

implemented by the AO. The burden 

associated with this requirement is the 

time required to provide notice to CMS 

of the immediate jeopardy situation and 

the wages for the AO staff person for the 

time spent preparing and submitting 

this notice. 

We believe that the AO would keep 

this information in the normal course of 

their business of providing home 

infusion therapy accreditation. 

Therefore, the AO should have these 

readily available. We further believe 

that the home infusion therapy AOs 

would keep records related to 

immediate jeopardy findings in an 

electronic format. 

The AO would incur a time burden 

for the time required to report the 

immediate jeopardy information to 

CMS. We estimate that it would take the 

AO no more than 20 minutes to prepare 

an email to CMS in which they provide 

the required information about the 

immediate jeopardy situation that has 

been discovered. The AO can attach 

electronic files to the email that contain 

the required information. It is important 

to note that we do not count, as a 

burden, the time spent by the home 

infusion therapy AO in finding the 

immediate jeopardy situation or 

resolving it, because it is the duty of any 

CMS-approved AO to monitor it’s 

accredited providers or supplier to 

ensure they are providing care that 

meets the accreditation standards and 

that they do not have any situation that 

put the patients or general public in 

imminent danger of harm. The home 

infusion therapy AO would incur a cost 

burden for the wages of the AO staff that 

prepares the email to CMS which 

notified CMS of the immediate jeopardy 

situation. We believe that the person at 

the AO who would prepare the 

immediate jeopardy notification email 

to CMS would most likely be a clinician 

such as a registered nurse. According to 

the U.S. Bureau of Labor Statistics, the 

mean hourly wage for a registered nurse 

is $35.36 (https://www.bls.gov/oes/ 

current/oes291141.htm). Therefore, the 

estimated cost burden to the home 

infusion therapy AO associated with the 

preparation and submission of the 

acknowledgement by the home infusion 

therapy AO would be $23.60 ($35.36 

divided by 60 minutes per hour = $0.59 

per minute/20 minutes × $0.59 per 

minute = $11.80) + ($11.80 for fringe 

benefits and overhead). 

The home infusion therapy AOs 

would have to perform these tasks and 

incur these time and costs burdens only 

if they discover an immediate jeopardy 

situation with an accredited home 

infusion therapy supplier. We would 

like to point out that this would not be 

a regular time and cost burden that 

would be incurred by the home infusion 

therapy AOs, as the discovery of 

immediate jeopardy situations by AOs 

do not occur frequently. 

It is important to note that we have 

not calculated the burden associated 

with the tasks required of the home 

infusion therapy AO under 

§ 488.1035(d) across all of the potential 

home infusion therapy AOs. We have 

not done so because the need for a home 

infusion therapy AO to report an 

immediate jeopardy situation to CMS 

would only occur on a sporadic basis. 

We do not believe that there would ever 

be a situation in which all 6 potential 

AOs would be required to report an 

immediate jeopardy situation 

simultaneously. Proposed § 488.1035(e) 

would require that within 10 calendar 

days after CMS’ notice to a CMSapproved home infusion therapy AO 

that CMS intends to withdraw approval 

of the AO’s home infusion therapy 

accreditation program, the home 

infusion therapy AO must provide 

written notice of the withdrawal to all 

of the home infusion therapy AO’s 

accredited suppliers. The time burden 

associated with this requirement would 

be the time spent by the AO staff to 

prepare the required notice that must be 

sent to all of the AOs accredited home 

infusion therapy suppliers and the time 

required for the AO to send this notice 

out to all of its accredited suppliers. 

We estimate that it would take that 

home infusion therapy AO 

approximately 45 minutes to prepare 

the notice that they must send out to 

their accredited suppliers. We believe it 

would take an additional 2 minutes per 

letter to be sent by the home infusion 

therapy AO to its accredited suppliers to 

prepare these letters for mailing (that 

is—fold letter, place in envelope, affix 

correct amount of postage and place the 

letter into the outgoing mail). We are not 

able to accurately estimate the amount 

of time it would take for the AO to send 

this notice out to all of its accredited 

suppliers because this would be 

dependent on the number of accredited 

suppliers the AO has at the time. 

However, if were to assume that a home 

infusion therapy AO had 50 accredited 

home infusion therapy suppliers, this 

task would take the AO staff 1.7 hours 

to complete (2 minutes × 50 letters = 100 

minutes/100 minutes divided by 60 

minutes per hour = 1.7 hours). 

The home infusion therapy AO would 

incur a cost burden for the wages of the 

AO staff person that prepares the 

required notification. We believe that 

the person at the AO who would 

prepare the required notification would 

most likely be a clinician such as a 

registered nurse. According to the U.S. 

Bureau of Labor Statistics, the mean 

hourly wage for a registered nurse is 

$35.36 (https://www.bls.gov/oes/ 

current/oes291141.htm). Therefore, the 

estimated cost burden to the home 

infusion therapy AO associated with the 

preparation of the required notice which 

is to be sent to all of the AO’s accredited 

suppliers would be $53.04 (45 minutes 

× $35.36 per hour = $26.52) + ($26.52 

for fringe benefits and overhead) 

The home infusion therapy would 

also incur a cost burden for the wages 

of the staff person for the time spent 

preparing the required notices for 

mailing and mailing them. We are 

unable to accurately estimate this cost 

burden because the time required to 

perform this task would be dependent 

on the number of accredited home 

infusion therapy supplier the AO has at 

the time. However, if were to assume 

that a home infusion therapy AO had 50 

accredited home infusion therapy 

suppliers, this task would take the AO 

staff 1.7 hours to complete (2 minutes × 

50 letters = 100 minutes/100 minutes 

divided by 60 minutes per hour = 1.7 

hours). We believe that the person that 

would perform this task would be an 

Administrative Assistant. According to 

the U.S. Bureau of Labor Statistics, the 

mean hourly wage for an executive 

administrative Assistant is $28.56 

(https://www.bls.gov/oes/current/ 

oes436011.htm). Therefore, the home 

infusion therapy AO would incur a cost 

burden in the amount of $97.92 for the 

completion of this task ($28.56 per hour 

divided by 60 minutes per hour = $0.48 

per minute/60 minutes per hour divided 

by 10 = 6 minutes per 0.1 hour/6 

minutes × 7 = 42 minutes = 0.7 hour/ 

60 minutes + 42 minutes = 102 minutes 

or 1.7 hours/$0.48 per minute × 102 

minutes = $48.96) + ($48.96 for fringe 

benefits and overhead). The home 

infusion therapy AO would incur an 

additional cost burden for 

miscellaneous costs. These costs would 

include the cost of the paper used to 

print the notices on, the printer ink 

used, the cost of the envelopes used, 

and the postage required to mail all the 

notices. We are unable to accurately 

estimate these costs as they are 

dependent on the number of notices that 

would be sent. We believe that these 

costs would not exceed $250. 

It is important to note that the home 

infusion therapy AO surveyors would 

rarely, if ever, be required to perform 

the tasks required by proposed 

§ 488.1035(e) because we would rarely 

withdraw the CMS approval of a home 


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infusion therapy AO. We would do so 

if there were serious, unresolved 

compliance concerns that the AO was 

unable or unwilling to rectify, even after 

being placed on an accreditation 

program probationary period. We do not 

believe that it would be possible that all 

of the home infusion therapy AOs 

would incur these cost and time 

burdens at the same time. 

(d) Burden for Home Infusion Therapy 

AOs Related to Proposed § 488.1040 

Proposed § 488.1040 would require 

that as part of the application review 

process, the ongoing review process, or 

the continuing oversight of an home 

infusion therapy AO’s performance, 

CMS may conduct onsite inspections of 

the home infusion therapy AO’s 

operations and offices at any time to 

verify the home infusion therapy AO’s 

representations and to assess the home 

infusion therapy AO’s compliance with 

its own policies and procedures. 

Proposed § 488.1040(b) provides that 

the activities to be performed by CMS 

staff during the onsite inspections may 

include, but are not limited to the 

following: (1) Interviews with various 

AO staff; (2) review of documents, 

survey files, audit tools, and related 

records; (3) observation of meetings 

concerning the home infusion therapy 

accreditation process; (4) auditing 

meetings concerning the accreditation 

process; (5) observation of in-progress 

surveys and audits; and (6) evaluation of 

the AO’s survey results and 

accreditation decision-making process. 

We believe that there would be little 

burden associated with the onsite visits 

made by CMS to the home infusion 

therapy AO’s operations and offices 

because most of the activities related to 

the onsite visit involve work performed 

by the CMS staff, which would not 

impose burden on the AO staff (such as 

review of records or observation of 

meeting held at the AOs offices). We 

estimate that the time burden to the 

home infusion therapy AO associated 

with these onsite visits would include 

the time required for the AO staff to 

greet the CMS team upon arrival and 

show them to the conference room, the 

time required to locate the records the 

CMS team requests for review, and the 

time required for CMS to conduct 

interviews of AO staff members. If the 

home infusion therapy AOs records are 

electronic, an AO staff member may 

need to remain with the CMS team 

during their record review to assist them 

with access to the AO’s records. 

We are not able to accurately estimate 

the total time that would be required for 

these activities because we have not yet 

accredited any home infusion therapy 

AOs, nor have we had an opportunity to 

perform an onsite visit to a home 

infusion therapy AO. We do not yet 

know what type of accreditation 

standards and surveys processes the 

home infusion therapy AOs would use. 

Also, we do not know the amount and 

type of records we would seek to review 

during an onsite visit to a home infusion 

therapy AO or approximately how much 

time we would need to review these 

records. Likewise, we do not yet know 

how much interaction we would need to 

have with the home infusion therapy 

AO staff or which AO staff members we 

would choose to interview. The onsite 

AO visits we have performed for other 

types of AOs have lasted 1 to 2 days 

depending on the type of AO. 

However, if we estimate that it would 

take 1 hour for the CMS team entrance 

conference, 8 hours for the CMS team to 

perform their records review and 1 hour 

for the CMS team conduct the exit 

conference, the home infusion therapy 

AO would incur a time burden in the 

amount of 1 hour for each AO staff 

person that attends the entrance 

conference, 8 hours for any staff that 

remains with the CMS team to assist 

them with the record review and 1 hour 

of time for each AO staff person that 

attends the exit conference. We believe 

that the AO staff that would be 

attending the entrance and exit 

conferences and assisting the CMS staff 

with their records review would most 

likely be clinicians such as registered 

nurses. According to the U.S. Bureau of 

Labor Statistics, the mean hourly wage 

for a non-industry specific registered 

nurse is $35.36 (https://www.bls.gov/ 

oes/current/oes291141.htm). We 

estimate that approximately 4 AO staff 

persons would attend the entrance and 

exit conferences and that one AO staff 

person would assist the CMS team with 

their record review. 

Based on the a previously stated time 

estimate, we estimate that the home 

infusion therapy AO would incur a cost 

burden in the amount of $282.88 for 

wages for four AO staff for attendance 

at the entrance conference. ($35.36 per 

hour per each AO staff × 1 hour = 

$35.36/$35.36 per hour × 4 AO staff = 

$141.44) + ($141.44 for fringe benefits 

and overhead). 

We further estimate that the AO 

would incur a cost burden in the 

amount of $282.88 for the wages of the 

four AO staff for attendance at the exit 

conference. ($35.36 per hour per each 

AO staff × 1 hour = $35.36/$35.36 per 

hour × 4 AO staff = $141.44) + ($141.44 

for fringe benefits and overhead). 

We also estimate that the AO would 

incur a cost burden in the amount of 

$565.76 for the wages of the AO staff 

person that would remain with the CMS 

team to assist them with their record 

review. (8 hours × $35.36 = $282.88) + 

($282.88 for fringe benefits and 

overhead). 

The total estimated cost burden to the 

home infusion therapy AO associated 

with the CMS onsite visit is $1,131.52 

($282.88 for entrance conference + 

$282.88 for exit conference + $565.76 

for assisting CMS staff with record 

review = $1,131.52). The estimated cost 

burden across all of the potential six 

home infusion therapy AOs would be 

$6,789.12. 

In this proposed rule, we have 

proposed that the six AOs that currently 

provide accreditation to home infusion 

therapy suppliers must submit an 

application to CMS for approval of a 

separate and distinct home infusion 

therapy accreditation program. A 

corporate onsite visit to the home 

infusion therapy AOs office is a part of 

the application review and approval 

process. Therefore, each of the AOs that 

submit an application to CMS for 

approval of a home infusion therapy 

program would incur the previously 

stated estimated burden related to the 

corporate onsite visit. However, after the 

initial application process has been 

completed, CMS would only make 

additional corporate onsite visits every 

6 years when the home infusion therapy 

AOs submit their renewal application. 

Therefore, this would not be is a 

frequent or ongoing burden incurred by 

the home infusion therapy AOs. 

(e) Burden for Home Infusion Therapy 

AOs Related to Proposed § 488.1045 

Proposed § 488.1045 contains 

regulations related to the voluntary and 

involuntary termination of the CMS 

approval of a home infusion therapy 

AO’s home infusion therapy 

accreditation program. Proposed 

§ 488.1045(a) would provide that a 

home infusion therapy accrediting 

organization that decides to voluntarily 

terminate its CMS-approved home 

infusion therapy accreditation program 

must provide written notice at least 90 

days in advance of the effective date of 

the termination to CMS and each of its 

accredited home infusion therapy 

suppliers. 

The requirement that the home 

infusion therapy AO provide notice of 

its decision to voluntarily terminate its 

CMS approved home infusion therapy 

accreditation program to CMS and all of 

its accredited home infusion therapy 

suppliers would cause the AO to incur 

the following time burdens: (1) The time 

required to prepare and send the 

required notice to CMS; and (2) the time 

required to prepare and send the 


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required notice to all of the AOs 

accredited home infusion therapy 

suppliers. We would require that the 

AO send the required notice of their 

decision to voluntarily terminate its 

CMS-approved accreditation program to 

CMS by U.S. mail. We would also 

require the AO to send the required 

notice to all of its accredited home 

infusion therapy suppliers by U.S. mail. 

We estimate that it would take 

approximately 60 minutes for the AO 

staff person to prepare the letter to CMS 

in which the AO notified CMS that the 

AO wishes to voluntarily terminate its 

CMS-approved home infusion therapy 

accreditation program, print the letter 

and mail it. 

We further estimate that it would take 

the AO staff person another 4 hours to 

perform the following tasks: (1) Draft a 

letter its accredited home infusion 

therapy suppliers, giving notice that the 

AO is voluntarily terminating its CMS 

approved home infusion therapy 

accreditation program; (2) perform a 

mail merge to prepare a copy of the 

letter addressed to each accredited 

home infusion therapy supplier; (3) 

print out a letter to each accredited 

supplier and envelope; put the letters 

into the envelopes; (4) affix the correct 

amount of postage; and (5) put the 

envelopes in the outgoing mail. We 

believe that the person at the AO who 

would perform these tasks would most 

likely be a clinician such as a registered 

nurse. According to the U.S. Bureau of 

Labor Statistics, the mean hourly wage 

for a registered nurse is $35.36 (https:// 

www.bls.gov/oes/current/ 

oes291141.htm). Therefore, the 

estimated cost burden to the home 

infusion therapy AO associated with the 

preparation of the required notice which 

is to be sent to all of the AO’s accredited 

suppliers would be $35.36 (60 minutes 

× $35.36 per hour = $35.36). 

The home infusion therapy AO would 

also incur a cost burden for the wages 

of the staff person for the time spent 

preparing and mailing the required 

notices to be sent to the AO’s accredited 

home infusion therapy suppliers. As 

stated previously, we estimate that it 

would take approximately 4 hours of 

time for an AO staff person to prepare 

the required notification letter to the 

AOs accredited providers, print out a 

copy of the letter for each accredited 

home infusion therapy supplier and put 

these letters into the mail. We believe 

that the person at the AO who would 

perform these tasks would most likely 

be a clinician such as a registered nurse. 

According to the U.S. Bureau of Labor 

Statistics, the mean hourly wage for a 

registered nurse is $35.36 (https://

www.bls.gov/oes/current/ 

oes291141.htm). Therefore, the 

estimated cost burden to the home 

infusion therapy AO associated with the 

preparation of the required notice for 

mailing would be $353.60 (4 hours × 

$35.36 per hour = $176.80) + ($176.80 

for fringe benefits and overhead). 

The home infusion therapy AO would 

incur an additional burden for 

miscellaneous costs associated with the 

preparation of the required notices to be 

sent to CMS and the AOs accredited 

home infusion therapy suppliers, 

including the cost of the paper on which 

the notices are printed, the printer ink 

used, the cost of the envelopes used, 

and the postage required to mail all of 

the notices. We are unable to accurately 

estimate these costs as they are 

dependent on the number of notices that 

would need to be sent. However we 

believe these costs would not exceed 

$200. We seek comment on how to 

estimate this burden. 

It is important to note that we have 

not calculated the burden associated 

with the tasks required of the home 

infusion therapy AO under § 488.1045 

across all of the potential home infusion 

therapy AOs. We have not done so 

because the need for a home infusion 

therapy AO to perform these tasks only 

arise if a home infusion therapy AO 

voluntarily decides to terminate its CMS 

approved home infusion therapy 

accreditation program. This would 

occur rarely, if ever. 

We do not believe that there would 

ever be a situation in which all six of 

the potential home infusion therapy 

AOs would decide to terminate their 

CMS approved accreditation programs 

simultaneously. 

Proposed § 488.1045(b) states that 

once CMS publishes a notice in the 

Federal Register announcing the 

decision to involuntarily terminate the 

home infusion therapy AO’s home 

infusion therapy accreditation program, 

the home infusion therapy AO must 

provide written notification to all 

suppliers accredited under its CMSapproved home infusion therapy 

accreditation program by no later than 

30 calendar days after the notice is 

published in the Federal Register. This 

notice would announce that CMS is 

withdrawing its approval of the AOs 

home infusion therapy accreditation 

program and the implications for the 

home infusion therapy suppliers 

payment status in accordance with the 

requirements at § 488.1010(f) once their 

current term of accreditation expires. 

The time burden associated with 

proposed § 488.1045(b) would be the 

time it takes for the home infusion 

therapy AO to prepare and send the 

required written notification to all 

accredited home infusion therapy 

suppliers which states that CMS is 

withdrawing the AOs approval of the 

home infusion therapy accreditation 

program and which also states the 

implications for the home infusion 

therapy suppliers payment status. We 

estimate that it would take no more than 

4 hours for an AO staff person to 

perform the following tasks: (1) Draft the 

required notification letter; (2) perform 

a mail merge to prepare a copy of the 

letter that is addressed to each home 

infusion therapy supplier accredited by 

the AO; (3) print copies of the 

notification letters for each of the AOs 

accredited home infusion therapy 

suppliers; (4) put each notifications 

letter into an envelope; (5) affix the 

correct amount of postage to the 

envelope and (6) put the envelopes into 

the outgoing mail. 

The home infusion therapy AO would 

incur a cost burden for the wages for the 

AO staff who performs the previously 

stated tasks. We believe that the person 

at the AO who would perform these 

tasks would most likely be a clinician 

such as a registered nurse. According to 

the U.S. Bureau of Labor Statistics, the 

mean hourly wage for a registered nurse 

is $35.36 (https://www.bls.gov/oes/ 

current/oes291141.htm). Therefore, the 

estimated cost burden to the home 

infusion therapy AO associated with the 

preparation of the required notice which 

is to be sent to all of the AO’s accredited 

suppliers would be $282.88 (4 hours × 

$35.36 per hour = $141.44) + ($141.44 

for fringe benefits and overhead). 

The home infusion therapy AO would 

incur an additional burden for 

miscellaneous costs associated with the 

preparation of the required notices to be 

sent to the AOs accredited home 

infusion therapy suppliers, including 

the cost of the paper on which the 

notices are printed, the printer ink used, 

the cost of the envelopes used, and the 

postage required to mail all of the 

notices. We believe that these costs 

would not exceed $200. 

It is important to note that we have 

not calculated the burden associated 

with the tasks required of the home 

infusion therapy AO under § 488.1045 

across all of the potential home infusion 

therapy AOs. We have not done so 

because the need for a home infusion 

therapy AO to perform these tasks 

required by § 488.1045(b) would only 

arise if CMS decides to involuntarily 

terminate the CMS approval of the AO’s 

home infusion therapy accreditation 

program. This would occur rarely, if 

ever. Also, we do not believe that there 

would ever be a situation in which all 

6 of the potential home infusion therapy 

AOs would decide to terminate their 


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CMS approved accreditation programs 

simultaneously. 

Proposed § 488.1045(c)(3) would 

require that for both voluntary and 

involuntary terminations of a home 

infusion therapy AOs CMS approved 

home infusion therapy accreditation 

program, the home infusion therapy AO 

must provide a second written 

notification to all of its accredited home 

infusion therapy suppliers ten calendar 

days prior to the AO’s accreditation 

program termination effective date. We 

estimate that the time and cost burdens 

associated with this requirement would 

be the same as our estimated burden for 

proposed § 488.1045(b) set forth 

previously. 

Proposed § 488.1045(d) sets forth the 

required steps that a home infusion 

therapy AO must take when one of its 

accredited home infusion therapy 

suppliers has requested a voluntary 

withdrawal from accreditation. The 

withdrawal from accreditation by the 

home infusion therapy supplier may not 

become effective until the AO completes 

all of the following 3 steps: (1) The 

home infusion therapy AO must contact 

the home infusion therapy supplier to 

seek written confirmation that the home 

infusion therapy supplier intends to 

voluntarily withdraw from the home 

infusion therapy accreditation program; 

(2) the home infusion therapy AO must 

advise the home infusion therapy 

supplier, in writing, of the statutory 

requirement for accreditation for all 

home infusion therapy suppliers and 

the possible payment consequences for 

a lapse in accreditation status; (3) the 

home infusion therapy AO must submit 

their final notice of the voluntary 

withdrawal of accreditation by the home 

infusion therapy supplier to CMS by no 

later than 5 business days after the 

request for voluntary withdrawal is 

ultimately processed and effective. 

The burden associated with the 

requirement that the home infusion 

therapy AO contact the home infusion 

therapy supplier to seek written 

confirmation that the home infusion 

therapy supplier intends to voluntarily 

withdraw from the home infusion 

therapy accreditation program would 

include the time required for the AO to 

contact the home infusion therapy 

supplier to request written confirmation 

that the home infusion therapy supplier 

does indeed want to terminate their 

home infusion therapy accreditation. 

We estimate that the AO would most 

likely contact the home infusion therapy 

supplier to make this request by 

telephone or email. We estimate this 

would take no more than 15 minutes. 

The AO would incur a cost burden for 

the wages of the AO staff person for the 

time spent contacting the home infusion 

therapy supplier to confirm they intend 

to voluntarily withdraw from the home 

infusion therapy accreditation program. 

We believe that the person at the AO 

who would perform this task would 

most likely be a clinician such as a 

registered nurse. According to the U.S. 

Bureau of Labor Statistics, the mean 

hourly wage for a registered nurse is 

$35.36 (https://www.bls.gov/oes/ 

current/oes291141.htm). Therefore, the 

estimated cost burden to the home 

infusion therapy AO associated with 

contacting the home infusion therapy 

supplier to confirm that they do want to 

voluntarily terminate would be $17.68 

(15 minutes × $35.36 per hour = $8.84) 

+ ($8.84 for fringe benefits and 

overhead). 

The home infusion therapy AO would 

also incur a time burden associated with 

the requirement that they send a written 

notice to the home infusion therapy 

supplier that is voluntarily terminating 

their home infusion therapy 

accreditation, which provides notice of 

the statutory requirement for 

accreditation for all home infusion 

therapy suppliers and the possible 

payment consequences for a lapse in 

accreditation status. We estimate that it 

would take the home infusion therapy 

no more than 60 minutes to prepare the 

written notification. 

We believe that the person at the AO 

who would prepare the required written 

notice to be sent to the home infusion 

therapy supplier that is voluntarily 

terminating its home infusion therapy 

accreditation would most likely be a 

clinician such as a registered nurse. 

According to the U.S. Bureau of Labor 

Statistics, the mean hourly wage for a 

registered nurse is $35.36 (https://

www.bls.gov/oes/current/ 

oes291141.htm). Therefore, the 

estimated cost burden to the home 

infusion therapy AO associated with the 

preparation of the required written 

notice would be $70.72 (1 hours × 

$35.36 per hour = $35.36) + ($35.36 for 

fringe benefits and overhead). We 

further estimate that the AO would 

incur postage costs in the amount of 

$0.50 for each letter sent. 

Finally, we estimate the burden 

associated with § 488.1045(d)(3) would 

include the time required for the home 

infusion therapy AO staff to prepare a 

final notice of voluntary withdrawal of 

accreditation by the home infusion 

therapy supplier and the time required 

to send this notice to CMS. We estimate 

that it would only take the AO staff 15 

minutes or less to prepare the required 

notice for CMS, because this notice 

could be sent to CMS by email. We 

estimate it would take an additional 10 

minutes of time for the AO staff to 

prepare the email and attach the written 

notice to the email. 

The AO would incur a cost burden for 

the wages of the AO staff for the time 

spent preparing the notice and sending 

it to CMS. We believe that the person at 

the AO who would prepare the required 

written notice to be sent to CMS would 

most likely be a clinician such as a 

registered nurse. According to the U.S. 

Bureau of Labor Statistics, the mean 

hourly wage for a registered nurse is 

$35.36 (https://www.bls.gov/oes/ 

current/oes291141.htm). Therefore, the 

estimated cost burden to the home 

infusion therapy AO associated with the 

preparation of the required written 

notice to be sent to CMS would be 

$29.48 (15 minutes × $35.36 per hour = 

$8.84) + (10 minutes × $35.36 per hour 

= $5.90) + ($14.74 for fringe benefits and 

overhead). 

It is important to note that we have 

not calculated the burden associated 

with the tasks required of the home 

infusion therapy AO under 

§ 488.1045(d) across all of the potential 

home infusion therapy AOs. We have 

not done so because the need for a home 

infusion therapy AO to perform these 

tasks would only arise if a home 

infusion therapy supplier would decide 

to voluntarily terminate its accreditation 

with the home infusion therapy AO. 

This would occur on an infrequent 

basis. We do not believe that there 

would ever be a situation in which all 

6 of the potential home infusion therapy 

AOs would have a home infusion 

therapy supplier decide to voluntarily 

terminate the accreditation with their 

home infusion therapy AOs 

simultaneously. 

(f) Burden for Home Infusion Therapy 

AOs Associated With Proposed 

§ 488.1050 

Proposed § 488.1050(a) would provide 

that a home infusion therapy AO that is 

dissatisfied with a determination, made 

by CMS, that its home infusion therapy 

accreditation requirements do not 

provide or do not continue to provide 

reasonable assurance that the suppliers 

accredited by the home infusion therapy 

AO meet the applicable quality 

standards is entitled to reconsideration. 

Proposed § 488.1050(b)(1) would 

require that a written request for 

reconsideration be filed within 30 

calendar days of the receipt of CMS’ 

notice of an adverse determination or 

non-renewal. Proposed § 488.1050(b)(2) 

would provide that the written request 

for reconsideration must specify the 

findings or issues with which the home 

infusion therapy AO disagrees and the 

reasons for the disagreement. Proposed 


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§ 488.1050(c)(1) provides the 

opportunity for a hearing to be 

conducted by a hearing officer 

appointed by the Administrator of CMS 

and proposed § 488.1050(c)(2) provides 

that written notice of the time and place 

of the hearing will be provided at least 

10 business days before the scheduled 

date. 

We estimate that it would take 

approximately 2 hours for a home 

infusion therapy AO to prepare its 

request for reconsideration. We believe 

that the person at the AO who would 

prepare the request for reconsideration 

would most likely be a clinician such as 

a registered nurse. According to the U.S. 

Bureau of Labor Statistics, the mean 

hourly wage for a registered nurse is 

$35.36 (https://www.bls.gov/oes/ 

current/oes291141.htm). Therefore, the 

estimated cost burden to the home 

infusion therapy AO associated with the 

preparation of the request for 

reconsideration would be $141.44 (2 

hours × $35.36 per hour = $70.72) + 

($70.72 for fringe benefits and 

overhead). 

The remaining information that 

would be submitted in connection with 

a request for reconsideration or a 

reconsideration hearing, including any 

evidence or testimony provided is not 

considered ‘‘information’’ in accordance 

with 5 CFR 1320.3(h)(8), which 

excludes as ‘‘information’’ any ‘‘facts or 

opinions obtained or solicited at or in 

connection with public hearings.’’ 

It is important to note that we have 

not calculated the burden associated 

with the tasks required of the home 

infusion therapy AO under § 488.1050 

across all of the potential home infusion 

therapy AOs. We have not done so 

because we believe that the filing of a 

request for reconsideration by a home 

infusion therapy AO would occur 

rarely, if ever. Further, we do not 

believe that there would ever be a 

situation in which all 6 of the potential 

home infusion therapy AOs would 

decide to file a request for 

reconsideration at the same time. 

Therefore, there would never be an 

occurrence where all the home infusion 

therapy AOs would incur the previously 

stated burden simultaneously. 

(g) Burdens for Home Infusion Therapy 

AOs Related to Survey Activities and 

Accreditation of Home Infusion Therapy 

Suppliers 

The home infusion therapy AO would 

incur time and cost associated the 

accreditation of home infusion therapy 

suppliers. These would include the time 

and costs required to perform an onsite 

survey, offsite survey or other type of 

survey activity for each home infusion 

therapy supplier that has hired that AO 

to provide accreditation. However, as 

we have not approved any home 

infusion therapy AOs, we do not yet 

know what type of home infusion 

therapy accreditation standards they 

will use, or what the home infusion 

therapy accreditation survey process 

will consist of. Therefore, we are unable 

to accurately estimate the time and cost 

burden associated with the survey of 

home infusion therapy suppliers. 

However, we can state that if the 

home infusion therapy AO were to 

perform an onsite survey, it would incur 

wages for each of the surveyors that are 

sent to perform the survey for the 

amount of time spent performing the 

survey. The AO would also incur wages 

for the time spent by the surveyors or 

other home infusion therapy AO staff in 

reviewing the survey documents, 

making a decision about whether to 

grant accreditation to the home infusion 

therapy supplier that was surveyed and 

preparing the decision letter to the 

home infusion therapy supplier. The 

AO would also incur travel costs for the 

AO staff to travel to the home infusion 

therapy supplier’s location to perform 

the survey. 

If the home infusion therapy AO were 

to do an offsite records audit survey, the 

AO would request that the home 

infusion therapy supply the AO with 

specific records. The AO would incur 

costs for the wages of the AO staff that 

performed the audit of the documents 

provided by the home infusion therapy 

supplier. The AO would also incur 

wages for the time spent by the 

surveyors or other home infusion 

therapy AO staff in making a decision 

about whether to grant accreditation to 

the home infusion therapy supplier that 

was audited and preparing the decision 

letter to the home infusion therapy 

supplier. 

We seek comment on how to estimate 

this burden. 

2. Burden to Home Infusion Therapy 

Suppliers Related to Home Infusion 

Therapy Health and Safety Standards 

All existing home infusion therapy 

suppliers are already accredited by 

existing home infusion therapy AOs to 

meet requirements established by 

private insurers and Medicare 

Advantage plans. We are proposing that, 

in order for the existing home infusion 

therapy suppliers accredited by these 

AOs to continue to receive payment for 

the home infusion therapy services 

provided, these AOs must obtain 

Medicare approval for a home infusion 

therapy accreditation program. To 

obtain this CMS approval, we are 

proposing that these AOs would be 

required to submit an application to 

CMS seeking approval of a home 

infusion therapy accreditation program 

that meets the requirements set forth in 

the proposed new home infusion 

therapy AO approval and oversight 

regulations and proposed new home 

infusion therapy health and safety 

regulations. We would also require that 

the home infusion therapy program 

submitted by these AOs be separate and 

distinct from the AOs home health 

deeming accreditation program. 

It is likely that the home infusion 

therapy suppliers would need to be 

resurveyed after their home infusion 

therapy AO obtains CMS approval of a 

home infusion therapy accreditation 

program, under section 

1861(iii)(3)(D)(i)(III) of the Act. We 

believe this resurvey would be 

necessary because the AOs would have 

to determine if the home infusion 

therapy suppliers they accredit meet 

their new Medicare-approved home 

infusion therapy accreditation program 

accreditation standards. However, if a 

current home infusion therapy AOs 

current home infusion therapy 

standards already meet or exceed the 

proposed home infusion therapy health 

and safety standards, so that a revision 

of that AOs home infusion therapy 

accreditation standards is not required, 

then a resurvey of that AO’s accredited 

home infusion therapy suppliers may 

not be necessary. 

The home infusion therapy supplier 

would incur some time burden in order 

to come into compliance with the home 

infusion therapy AOs new home 

infusion therapy accreditation program 

requirements initially and thus prepare 

for the accreditation survey. However, 

all existing home infusion therapy 

suppliers are already accredited by 

existing home infusion therapy AOs to 

meet requirements established by 

private insurers and Medicare 

Advantage plans. Therefore, we assume 

that there would be little, is any new 

burden imposed on home infusion 

therapy suppliers in order to implement 

the proposed new health and safety 

standards. 

The home infusion therapy supplier 

would be charged a fee by the AO for 

providing accreditation services. Fees 

for the home infusion therapy 

accreditation currently offered by the 

six AOs listed previously accreditation 

programs offered by the six AOs listed 

previously vary between $5,950 and 

$12,500 and, in general, currently cover 

all of the following items: Application 

fee, manuals, initial accreditation fee, 

onsite surveys or other auditing 

(generally once every 3 years), and 

travel, when necessary for survey 


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personnel. Accreditation costs also vary 

by the size of the provider or supplier 

seeking accreditation, its number of 

locations, and the number of services it 

provides. 

We recognize that cost and time 

burdens associated with becoming 

accredited may be a barrier for small 

suppliers such as home infusion therapy 

suppliers. We propose to implement the 

following to minimize the burden of 

accreditation on suppliers, including 

small businesses: 

• Multiple accreditation 

organizations—We expect that more 

than one AO would submit an 

application to become a designated 

Home Infusion Therapy AO. We believe 

that selection of more than one home 

infusion therapy AO would introduce 

competition resulting in reductions in 

accreditation costs. 

• Required plan for small 

businesses—During the application 

process we would require prospective 

home infusion therapy AOs to include 

a plan that details their methodology to 

reduce accreditation fees and burden for 

small or specialty suppliers. This would 

need to include that the AO’s fees are 

based on the size of the organization. 

• Reasonable quality standards—The 

quality standards that would be used to 

evaluate the services rendered by each 

home infusion therapy supplier are 

being proposed in this rule. Many home 

infusion therapy suppliers already 

comply with the standards and have 

incorporated these practices into their 

daily operations. It is our belief that 

compliance with the quality standards 

would result in more efficient and 

effective business practices and would 

assist suppliers in reducing overall 

costs. 

There are at least two important 

sources of uncertainty in estimating the 

impact of accreditation on home 

infusion therapy suppliers. First, our 

estimates assume that all home infusion 

therapy suppliers with positive 

Medicare payments would seek 

accreditation. We assume that home 

infusion therapy suppliers who 

currently receive no Medicare allowed 

charges would choose not to seek 

accreditation. It is also possible that 

many of the home infusion therapy 

suppliers with allowed charges between 

$1 and $1,000 may decide not to incur 

the costs of accreditation. 

Second, it is difficult to predict what 

accreditation fees would be in the 

future. Our experience with other 

accreditation programs has lead us to 

believe that the accreditation rates 

would go up, due to factors such as 

wage increases, and increased travel 

costs. To monitor accreditation fees, we 

propose to require the AOs for home 

infusion therapy suppliers to submit 

their proposed fees to CMS for review 

for reasonableness. We would require 

home infusion therapy AOs to notify 

CMS anytime there is an increase in 

accreditation fees. 

(d) Medicare-Certified Accreditation 

Organizations—Proposed Changes to 42 

CFR 488.5 

We have proposed to modify the AO 

approval and oversight regulations for 

Medicare-certified providers and 

suppliers by adding two new 

requirements. The first proposed new 

requirement is to added to 42 CFR 

488.5(a)(7) and is a requirement that in 

their application for CMS approval, the 

AOs that accredited Medicare-certified 

providers and suppliers must include a 

statement acknowledging that all 

accrediting organization surveyors have 

completed or will complete the relevant 

program specific CMS online trainings 

established for state surveyors, initially, 

and thereafter. The second requirement 

is to be added as § 488.5(a)(18)(iii) and 

would require that the AOs for 

Medicare-certified providers and 

suppliers include a written statement in 

their application for CMS approval 

agreeing that if a fully accredited and 

deemed facility in good standing 

provides written notification that they 

wish to voluntarily withdraw from the 

accrediting organization’s CMSapproved accreditation program, the 

accrediting organization must continue 

the facility’s current accreditation in full 

force and effect until the effective date 

of withdrawal identified by the facility 

or the expiration date of the term of 

accreditation, whichever comes first. 

(1) Burden Associated With the Online 

Training Requirement for AO Surveyors 

CMS provides a number of online 

surveyor training modules that are 

available to the State Survey Agency 

surveyors. We have proposed to require 

the AO surveyors to take this training in 

an attempt to decrease the historically 

high disparity rate between the AOs 

survey results and those of the 

validation surveys performed by the 

State Survey Agency surveyors. 

CMS offers 168 online surveyor 

training programs that are available for 

the State Survey Agency surveyors. This 

website provides courses that are 

general in nature such as ‘‘Principles of 

Documentation Learning Activity—Long 

Term Care’’, ‘‘Basic Writing Skills for 

Surveyor Staff’’, Infection Control, 

Patient Safety, and Emergency 

Preparedness. The CMS Surveyor 

Training website also offers courses 

related to specific healthcare settings, 

services, and regulations, such as 

hospitals, CAHs, ASCs, CLIA, CMHCs, 

EMTALA, FQHCs, HHAs and OASIS, 

Hospices, Nursing Homes and the MDS, 

Outpatient Physical Therapy/Outpatient 

Speech Therapy (OPT/OST). These 

courses are self-paced and the person 

taking the course can take the courses 

over a period of time. The amount of 

time required to complete each of these 

training course varies depending on the 

pace preferred by the trainee. 

We estimate that each SA surveyor 

takes approximately 10 courses on the 

CMS Surveyor Training website. We 

estimate that it would take 

approximately 3–5 hours to complete 

each of these courses. We believe that 

the surveyors for AOs that accredit 

Medicare-certified providers should 

take the same number and type of 

surveyor training courses as the SA 

surveyors (that is—approximately 10 

courses). This means that each of the 

AOs surveyors that takes this training 

would incur a time burden in the 

amount of 30 to 50 hours. 

The AOs that accredit Medicarecertified providers and suppliers would 

incur a cost burden for the wages of the 

surveyor for the time they spend taking 

these online surveyor training courses. 

Most surveyors are clinicians such as 

registered nurses. According to the U.S. 

Bureau of Labor Statistics, the mean 

hourly wage for a registered nurse is 

$35.36 (https://www.bls.gov/oes/ 

current/oes291141.htm). As noted 

previously, we estimated that it would 

take approximately 30–50 hours for 

each AO surveyor to complete 10 online 

surveyor courses. Therefore, the AO 

would incur wages in the amount of 

$1,060.80 to $1,768 per each surveyor 

that completes the CMS online surveyor 

training (($35.36 × 30 hours = $1,060.80) 

and ($35.36 × 50 hours = $1,768)). The 

AO would also incur additional costs 

for fringe benefits and overhead in the 

amount of $1,060.80 to $1,768.00 per 

each surveyor that completes the CMS 

online surveyor training. 

We are not able to accurately estimate 

to total time and cost burden to each AO 

for the wages incurred for the time spent 

by all surveyors of that AO that take the 

CMS online surveyor training courses, 

because we do not know exactly how 

many surveyors each AO has. However, 

if we estimate that each AO has 15 

surveyors, the estimated time burden to 

each AO associated with this 

requirement would be 450 to 750 hours 

((30 hours × 15 surveyors = 450 hours 

per all surveyors) and (50 hours × 15 

surveyors = 750 hours per all 

surveyors)). The estimated cost burden 

to each AO for Medicare-certified 

providers and supplies associated with 


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this requirement would be $31,824 to 

$53,040 (($1,060.80 × 15 = $15,912) and 

($1,768.00 × 15 = $26,520) and ($15,912 

to $26,520 for fringe benefits and 

overhead)). 

There are currently 9 AOs that 

accredit Medicare-certified providers 

and suppliers. We estimate that the time 

burden across all of these AOs 

associated with the requirement that 

their surveyors take the CMS online 

surveyor training would be 4,050 to 

6,750 ((450 hours per all surveyors/AO 

× 9 AOs = 4,050 hours across all AOs) 

and (750 hours per all surveyors/AO × 

9 AOs = 6,750 hours across all AOs)). 

The estimated cost across all AOs that 

accredit Medicare-certified providers 

and suppliers would be $143,208 to 

$238,680 (($15,912 × 9 AOs = $143,208) 

and ($26,520 × 9 AOs = $238,680)). The 

cost for fringe benefits and overhead on 

these estimated wages across all AOs 

would be $143,208 to 238,680. 

(2) Burden Associated With the 

Statement Requirement for AOs 

We are proposing that AOs approved 

in accordance with section 1865 of the 

Act, and regulated under part 488 

subpart A, provide a written statement 

in their application in which they agree 

to continue a provider’s or supplier’s 

current accreditation in full force and 

effect until the effective date of 

withdrawal identified by the facility or 

the expiration date of the term of 

accreditation, whichever comes first. 

Proposed § 488.5(a)(18)(iii) would 

require the AOs for Medicare-certified 

providers and suppliers to include a 

written statement in their application 

for CMS approval of their accreditation 

program, agreeing that if a fully 

accredited and deemed facility in good 

standing provides written notification 

that they wish to voluntarily withdraw 

from the accrediting organization’s 

CMS-approved accreditation program, 

the accrediting organization must 

continue the facility’s current 

accreditation in full force and effect 

until the effective date of withdrawal 

identified by the facility or the 

expiration date of the term of 

accreditation, whichever comes first. 

We believe that the AOs that accredit 

Medicare-certified providers and 

suppliers would incur limited burden 

associated with this requirement, 

because this proposed regulation simply 

requires that the AOs to include a 

statement in their application stating 

that they agree to continue the facility’s 

current accreditation in full force and 

effect until the effective date of 

withdrawal identified by the facility or 

the expiration date of the term of 

accreditation, whichever comes first, if 

a provider of supplier provides written 

notification that they wish to 

voluntarily withdraw from the 

accrediting organization’s CMSapproved accreditation program. We 

believe that this written statement to be 

provided by the AO would consist of 

only 1 to 2 paragraphs and would take 

no more than 15 minutes to prepare. 

We believe that a clinicians such as 

registered nurses would prepare the 

required statement to be included in the 

AOs application. According to the U.S. 

Bureau of Labor Statistics, the mean 

hourly wage for a registered nurse is 

$35.36 (https://www.bls.gov/oes/ 

current/oes291141.htm). Therefore, the 

estimated cost burden to the AOs that 

accredit Medicare-certified providers 

and suppliers associated with the 

preparation of the required statement 

would be approximately $17.68 ((15 

minutes × $35.36 per hour = $8.84) + 

($8.84 for fringe benefits and overhead)). 

There are nine AOs that accredit 

Medicare-certified providers and 

suppliers. The cost across all AOs for 

the completion of this task would be 

$158.12 (($8.84 × 9 AOs = $79.56) + 

($79.56 for fringe benefits and overhead. 

However, AOs for Medicare-certified 

providers and suppliers are required to 

submit a renewal application only every 

six years. Therefore, the existing AOs 

would be required to submit the 

statement stating that they agree to 

continue the facility’s current 

accreditation in full force and effect 

until the effective date of withdrawal 

identified by the facility or the 

expiration date of the term of 

accreditation, whichever comes first, if 

a provider of supplier provides written 

notification that they wish to 

voluntarily withdraw from the 

accrediting organization’s CMSapproved accreditation program with 

their next renewal application which is 

submitted after the publication of the 

final rule. While we have calculated the 

cost for the performance of this task 

across all AOs that accredit Medicarecertified providers and suppliers, it is 

important to note that the existing AOs 

are scheduled to submit their renewal 

applications at varying dates and times 

over a period of several years. Therefore 

there will be no time period in which 

all of these AOs will incur these 

expenses simultaneously. 

D. Detailed Economic Analysis 

1. HH PPS 

This rule proposes updates for the CY 

2019 HH PPS rates contained in the CY 

2018 HH PPS final rule (82 FR 51676 

through 51752). The impact analysis of 

this proposed rule presents the 

estimated expenditure effects of policy 

changes proposed in this rule. We use 

the latest data and best analysis 

available, but we do not make 

adjustments for future changes in such 

variables as number of visits or casemix. 

This analysis incorporates the latest 

estimates of growth in service use and 

payments under the Medicare HH 

benefit, based primarily on Medicare 

claims data from 2017. We note that 

certain events may combine to limit the 

scope or accuracy of our impact 

analysis, because such an analysis is 

future-oriented and, thus, susceptible to 

errors resulting from other changes in 

the impact time period assessed. Some 

examples of such possible events are 

newly-legislated general Medicare 

program funding changes made by the 

Congress, or changes specifically related 

to HHAs. In addition, changes to the 

Medicare program may continue to be 

made as a result of the Affordable Care 

Act, or new statutory provisions. 

Although these changes may not be 

specific to the HH PPS, the nature of the 

Medicare program is such that the 

changes may interact, and the 

complexity of the interaction of these 

changes could make it difficult to 

predict accurately the full scope of the 

impact upon HHAs. 

a. HH PPS for CY 2019 

Table 59 represents how HHA 

revenues are likely to be affected by the 

policy changes proposed in this rule for 

CY 2019. For this analysis, we used an 

analytic file with linked CY 2017 OASIS 

assessments and HH claims data for 

dates of service that ended on or before 

December 31, 2017. The first column of 

Table 59 classifies HHAs according to a 

number of characteristics including 

provider type, geographic region, and 

urban and rural locations. The second 

column shows the number of facilities 

in the impact analysis. The third 

column shows the payment effects of 

the CY 2019 wage index and revised 

labor share. The fourth column shows 

the payment effects of the CY 2019 casemix weights. The fifth column shows 

the effects of the new rural add-on 

payment provision in statute. The sixth 

column shows the effects of the revised 

FDL ratio used to calculate outlier 

payments, and the seventh column 

shows the effects of the CY 2019 home 

health payment update percentage. 

The last column shows the combined 

effects of all the policies proposed in 

this rule. Overall, it is projected that 

aggregate payments in CY 2019 would 

increase by 2.1 percent. As illustrated in 

Table 59, the combined effects of all of 

the changes vary by specific types of 


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providers and by location. We note that 

some individual HHAs within the same 

group may experience different impacts 

on payments than others due to the 

distributional impact of the CY 2019 

wage index, the extent to which HHAs 

had episodes in case-mix groups where 

the case-mix weight decreased for CY 

2019 relative to CY 2018, the percentage 

of total HH PPS payments that were 

subject to the low-utilization payment 

adjustment (LUPA) or paid as outlier 

payments, and the degree of Medicare 

utilization. 

TABLE 59—ESTIMATED HHA IMPACTS BY FACILITY TYPE AND AREA OF THE COUNTRY, CY 2019 

Number of 

agencies 

CY 2019 

wage index 

and labor 

share 1

(%) 

CY 2019 

case-mix 

weights 2

(%) 

Rural 

add-on 

revisions 

(%) 

Updated 

outlier 

FDL ratio 

0.51 

(%) 

CY 2019 

HH payment 

update 

percentage 3

Total 

(%) 

All Agencies ............................................. 10,547 0.0 0.0 ¥0.1 0.1 2.1 2.1 

Facility Type and Control 

Free-Standing/Other Vol/NP .................... 1,065 ¥0.3 ¥0.1 0.0 0.2 2.1 1.9 

Free-Standing/Other Proprietary .............. 8,366 0.1 0.0 ¥0.1 0.1 2.1 2.2 

Free-Standing/Other Government ........... 260 0.3 0.1 ¥0.1 0.2 2.1 2.6 

Facility-Based Vol/NP .............................. 604 0.0 0.0 0.0 0.2 2.1 2.3 

Facility-Based Proprietary ........................ 76 ¥0.3 0.1 ¥0.2 0.2 2.1 1.9 

Facility-Based Government ...................... 176 ¥0.1 0.0 ¥0.3 0.2 2.1 1.9 

Subtotal: Freestanding ...................... 9,691 0.0 0.0 ¥0.1 0.1 2.1 2.1 

Subtotal: Facility-based .................... 856 ¥0.1 0.0 ¥0.1 0.2 2.1 2.1 

Subtotal: Vol/NP ............................... 1,669 ¥0.2 ¥0.1 0.0 0.2 2.1 2.0 

Subtotal: Proprietary ......................... 8,442 0.1 0.0 ¥0.1 0.1 2.1 2.2 

Subtotal: Government ....................... 436 0.1 0.0 ¥0.2 0.2 2.1 2.2 

Facility Type and Control: Rural 

Free-Standing/Other Vol/NP .................... 253 0.1 0.1 ¥0.3 0.2 2.1 2.2 

Free-Standing/Other Proprietary .............. 821 0.6 0.0 ¥0.7 0.1 2.1 2.1 

Free-Standing/Other Government ........... 176 0.5 0.1 ¥0.2 0.2 2.1 2.7 

Facility-Based Vol/NP .............................. 273 0.2 0.1 ¥0.3 0.2 2.1 2.3 

Facility-Based Proprietary ........................ 41 0.1 0.2 ¥0.5 0.1 2.1 2.0 

Facility-Based Government ...................... 134 0.2 0.1 ¥0.4 0.2 2.1 2.2 

Facility Type and Control: Urban 

Free-Standing/Other Vol/NP .................... 812 ¥0.4 ¥0.1 0.0 0.2 2.1 1.8 

Free-Standing/Other Proprietary .............. 7,545 0.0 0.0 0.0 0.1 2.1 2.2 

Free-Standing/Other Government ........... 84 0.1 0.1 0.0 0.2 2.1 2.5 

Facility-Based Vol/NP .............................. 331 ¥0.1 ¥0.1 0.0 0.2 2.1 2.1 

Facility-Based Proprietary ........................ 35 ¥0.6 0.1 0.0 0.2 2.1 1.8 

Facility-Based Government ...................... 42 ¥0.4 ¥0.1 ¥0.1 0.1 2.1 1.6 

Facility Location: Urban or Rural 

Rural ......................................................... 1,698 0.4 0.0 ¥0.6 0.1 2.1 2.0 

Urban ....................................................... 8,849 0.0 0.0 0.0 0.1 2.1 2.2 

Facility Location: Region of the Country (Census Region) 

New England ............................................ 363 ¥0.9 0.0 0.0 0.2 2.1 1.4 

Mid Atlantic .............................................. 482 ¥0.3 ¥0.2 0.0 0.2 2.1 1.8 

East North Central ................................... 2,031 ¥0.3 0.1 0.0 0.1 2.1 2.0 

West North Central .................................. 705 0.0 0.1 0.0 0.2 2.1 2.4 

South Atlantic ........................................... 1,647 0.0 ¥0.2 0.0 0.1 2.1 2.0 

East South Central ................................... 423 0.1 ¥0.1 ¥0.5 0.1 2.1 1.7 

West South Central .................................. 2,774 0.6 0.1 ¥0.3 0.1 2.1 2.6 

Mountain .................................................. 678 ¥0.3 0.1 0.1 0.2 2.1 2.2 

Pacific ....................................................... 1,403 0.3 0.2 0.0 0.1 2.1 2.7 

Other ........................................................ 41 0.9 ¥0.9 0.0 0.2 2.1 2.3 

Facility Size (Number of First Episodes) 

<100 episodes ......................................... 2,907 0.0 0.3 0.0 0.2 2.1 2.6 

100 to 249 ................................................ 2,301 0.1 0.4 ¥0.1 0.1 2.1 2.6 

250 to 499 ................................................ 2,218 0.1 0.3 ¥0.1 0.1 2.1 2.5 

500 to 999 ................................................ 1,637 0.1 0.1 ¥0.1 0.1 2.1 2.3 

1,000 or More .......................................... 1,484 0.0 ¥0.1 ¥0.1 0.1 2.1 2.0 

Source: CY 2017 Medicare claims data for episodes ending on or before December 31, 2017 for which we had a linked OASIS assessment. 1The impact of the CY 2019 home health wage index is offset by the wage index budget neutrality factor described in section III.C.4 of this 

proposed rule. 


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2The impact of the CY 2019 home health case-mix weights reflects the recalibration of the case-mix weights offset by the case-mix weights 

budget neutrality factor described in section III.B of this proposed rule. 3The CY 2019 home health payment update percentage reflects the home health payment update of 2.1 percent as described in section 

III.C.2 of this proposed rule. 

Region Key: 

New England = Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont; Middle Atlantic = Pennsylvania, New Jersey, 

New York; South Atlantic = Delaware, District of Columbia, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia, West Virginia; 

East North Central = Illinois, Indiana, Michigan, Ohio, Wisconsin; East South Central = Alabama, Kentucky, Mississippi, Tennessee; West 

North Central = Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota; West South Central = Arkansas, Louisiana, Oklahoma, Texas; Mountain = Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah, Wyoming; Pacific = Alaska, California, Hawaii, Oregon, Washington; Other = Guam, Puerto Rico, Virgin Islands. 

b. HH PPS for CY 2020 (Proposed 

PDGM) 

Table 60 represents how HHA 

revenues are likely to be affected by the 

policy changes proposed in this rule for 

CY 2020. For this analysis, we used an 

analytic file with linked CY 2017 OASIS 

assessments and CY 2017 HH claims 

data (as of March 2, 2018) for dates of 

service that ended on or before 

December 31, 2017. The first column of 

Table 60 classifies HHAs according to a 

number of characteristics including 

provider type, geographic region, and 

urban and rural locations. The second 

column shows the number of HHAs in 

the impact analysis. The PDGM, as 

required by Section 51001(a)(2)(A) of 

the BBA of 2018, will be implemented 

in a budget neutral manner and the 

third column shows the total impact of 

the proposed PDGM as outlined in 

section III.F of this proposed rule. As 

illustrated in Table 60, the effect of the 

proposed PDGM varies by specific types 

of providers and location. We note that 

some individual HHAs within the same 

group may experience different impacts 

on payments than others. This is due to 

distributional differences among HHAs 

with regards to the percentage of total 

HH PPS payments that were subject to 

the low-utilization payment adjustment 

(LUPA) or paid as outlier payments, the 

degree of Medicare utilization, and the 

ratio of overall visits that were provided 

as therapy versus skilled nursing. 

As outlined in section III.F of this 

proposed rule, several OASIS items 

would no longer be needed to case-mix 

adjust the 30-day payment under the 

PDGM; therefore, we would make 19 

current OASIS items (48 data elements) 

optional at the FU time point starting 

January 1, 2020. As also discussed in 

section III.F. of this proposed rule, in 

order to calculate the case-mix adjusted 

payment amount for the PDGM, we 

would add the collection of two current 

OASIS items (10 data elements) at the 

FU time point starting January 1, 2020. 

Section VII of this proposed rule 

provides a detailed description of the 

net decrease in burden associated with 

these proposed changes in conjunction 

with the changes in burden that result 

from OASIS item collection changes due 

to the proposed removal of certain 

measures required under HH QRP, also 

effective for January 1, 2020 as outlined 

in section V.E of this rule. We estimate 

that the burden associated with OASIS 

item collection as a result of this 

proposed rule results in a net $60 

million in annualized cost savings to 

HHAs, discounted at 7 percent relative 

to year 2016, over a perpetual time 

horizon beginning in CY 2020. 

TABLE 60—IMPACTS OF PDGM, CY 2020 

Number of 

agencies 

PDGM 

(%) 

All Agencies ............................................................................................................................................................. 10,480 0.0% 

Facility Type and Control 

Free-Standing/Other Vol/NP .................................................................................................................................... 1,055 2.6 

Free-Standing/Other Proprietary ............................................................................................................................. 8,309 ¥1.2 

Free-Standing/Other Government ........................................................................................................................... 260 1.1 

Free-Based Vol/NP .................................................................................................................................................. 604 3.8 

Free-Based Proprietary ........................................................................................................................................... 76 4.4 

Free-Based Government ......................................................................................................................................... 176 4.6 

Subtotal: Freestanding ..................................................................................................................................... 9,624 ¥0.4 

Subtotal: Free-based ........................................................................................................................................ 856 3.9 

Subtotal: Vol/NP ............................................................................................................................................... 1,659 2.9 

Subtotal: Proprietary ......................................................................................................................................... 8,385 ¥1.2 

Subtotal: Government ....................................................................................................................................... 436 2.9 

Facility Type and Control: Rural 

Free-Standing/Other Vol/NP .................................................................................................................................... 253 3.8 

Free-Standing/Other Proprietary ............................................................................................................................. 820 3.9 

Free-Standing/Other Government ........................................................................................................................... 176 1.9 

Free-Based Vol/NP .................................................................................................................................................. 273 4.1 

Free-Based Proprietary ........................................................................................................................................... 41 11.3 

Free-Based Government ......................................................................................................................................... 134 5.9 

Facility Type and Control: Urban 

Free-Standing/Other Vol/NP .................................................................................................................................... 802 2.4 

Free-Standing/Other Proprietary ............................................................................................................................. 7,489 ¥1.8 

Free-Standing/Other Government ........................................................................................................................... 84 0.3 

Free-Based Vol/NP .................................................................................................................................................. 331 3.7 

Free-Based Proprietary ........................................................................................................................................... 35 0.1 


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TABLE 60—IMPACTS OF PDGM, CY 2020—Continued 

Number of 

agencies 

PDGM 

(%) 

Free-Based Government ......................................................................................................................................... 42 3.4 

Facility Location: Urban or Rural 

Rural ........................................................................................................................................................................ 1,697 4.0 

Urban ....................................................................................................................................................................... 8,783 ¥0.6 

Facility Location: Region of the Country (Census Region) 

New England ........................................................................................................................................................... 354 2.5 

Mid Atlantic .............................................................................................................................................................. 479 3.1 

East North Central ................................................................................................................................................... 2,012 ¥1.1 

West North Central .................................................................................................................................................. 703 ¥3.9 

South Atlantic ........................................................................................................................................................... 1,643 ¥5.3 

East South Central .................................................................................................................................................. 423 0.9 

West South Central ................................................................................................................................................. 2,750 4.1 

Mountain .................................................................................................................................................................. 675 ¥5.2 

Pacific ...................................................................................................................................................................... 1,400 3.8 

Other ........................................................................................................................................................................ 41 11.0 

Facility Size (Number of 1st Episodes) 

< 100 episodes ........................................................................................................................................................ 2,841 1.9 

100 to 249 ................................................................................................................................................................ 2,301 1.1 

250 to 499 ................................................................................................................................................................ 2,218 0.6 

500 to 999 ................................................................................................................................................................ 1,636 ¥0.3 

1,000 or More .......................................................................................................................................................... 1,484 ¥0.2 

Nursing/Therapy Visits Ratio 

1st Quartile (Lowest 25 Nursing) ............................................................................................................................. 2,620 ¥9.9 

2nd Quartile ............................................................................................................................................................. 2,620 ¥0.8 

3rd Quartile .............................................................................................................................................................. 2,620 6.5 

4th Quartile (Top 25 Nursing) .................................................................................................................................. 2,620 17.0 

Source: CY 2017 Medicare claims data (as of March 2, 2018) for episodes ending on or before December 31, 2017 for which we had a linked 

OASIS assessment. 

Note(s): The ‘‘PDGM’’ is the 30-day version of the model with no behavioral assumptions applied. From the impact file, this analysis omits 

354,099 60-day episodes not grouped under the PDGM (either due to a missing SOC OASIS, because they could be assigned to a clinical 

grouping, or had missing therapy/nursing visits). After converting 60-day episodes to 30-day periods for the PDGM, a further 26 periods were excluded with missing NRS weights, and 2,386 periods with a missing urban/rural indicator. These excluded episodes results overall in 67 fewer 

HHAs being represented than in the standard impact tables. 

Region Key: 

New England = Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont; Middle Atlantic = Pennsylvania, New Jersey, 

New York; South Atlantic = Delaware, District of Columbia, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia, West Virginia; 

East North Central = Illinois, Indiana, Michigan, Ohio, Wisconsin; East South Central = Alabama, Kentucky, Mississippi, Tennessee; West 

North Central = Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota; West South Central = Arkansas, Louisiana, Oklahoma, Texas; Mountain = Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah, Wyoming; Pacific = Alaska, California, Hawaii, Oregon, Washington; Other = Guam, Puerto Rico, Virgin Islands. 

In response to the CY 2019 case-mix 

adjustment methodology refinements 

proposed in the CY 2018 HH PPS 

proposed rule (82 FR 35270), a few 

commenters requested that CMS include 

more information in the impact table for 

the proposed PDGM, specifically how 

payments are impacted for patients with 

selected clinical conditions as was 

included in the Technical Report which 

is available at: https://

downloads.cms.gov/files/ 

hhgm%20technical

%20report%20120516%20sxf.pdf. 

Therefore, we are including Table 61 

which provides more information on the 

impact of the PDGM case-mix 

adjustment methodology for patients 

with selected clinical conditions. 

TABLE 61—IMPACT OF THE PDGM FOR SELECTED PATIENT CHARACTERISTICS

Ratio of average PDGM 

payment to average 

current (30-day 

equivalent) payment 

All Episodes (60-Day Count) ............................................................................................................................................... 1.00 

Clinical Group 

Behavioral Health ................................................................................................................................................................ 0.85 

Complex ............................................................................................................................................................................... 1.13 


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TABLE 61—IMPACT OF THE PDGM FOR SELECTED PATIENT CHARACTERISTICS—Continued 

Ratio of average PDGM 

payment to average 

current (30-day 

equivalent) payment 

MMTA .................................................................................................................................................................................. 1.00 

MS Rehab ............................................................................................................................................................................ 0.96 

Neuro Rehab ....................................................................................................................................................................... 0.93 

Wound .................................................................................................................................................................................. 1.27 

Functional Level 

Low ...................................................................................................................................................................................... 0.95 

Medium ................................................................................................................................................................................ 1.00 

High ...................................................................................................................................................................................... 1.05 

Admission Source 

Community ........................................................................................................................................................................... 0.89 

Institutional ........................................................................................................................................................................... 1.30 

Timing 

Early ..................................................................................................................................................................................... 1.25 

Late ...................................................................................................................................................................................... 0.87 

Comorbidity Group 

No adjustment ...................................................................................................................................................................... 0.97 

Single Comorbidity ............................................................................................................................................................... 1.02 

Comorbidity Interaction ........................................................................................................................................................ 1.22 

Dual Status 

Not (Full) Dual Eligible ......................................................................................................................................................... 0.99 

Yes (Full) Dual Eligible ........................................................................................................................................................ 1.03 

Parenteral Nutrition 

No Parenteral Nutrition ........................................................................................................................................................ 1.00 

Yes Parenteral Nutrition ...................................................................................................................................................... 1.18 

Surgical Wounds 

No Known Surgical Wound ................................................................................................................................................. 0.98 

Yes Known Surgical Wound ................................................................................................................................................ 1.11 

Ulcers 

No Ulcers Recorded ............................................................................................................................................................ 0.99 

Positive Number of Ulcers Recorded .................................................................................................................................. 1.16 

Bathing 

Able to Bathe with some independence .............................................................................................................................. 0.97 

Cannot bathe independently ................................................................................................................................................ 1.08 

Poorly-Controlled Cardiac Dysrhythmia 

No Poorly-Controlled Cardiac Dysrhythmia ......................................................................................................................... 1.00 

Yes Poorly-Controlled Cardiac Dysrhythmia ....................................................................................................................... 1.04 

Poorly-Controlled Diabetes 

No Poorly-Controlled Diabetes ............................................................................................................................................ 0.99 

Yes Poorly-Controlled Diabetes .......................................................................................................................................... 1.06 

Poorly-Controlled Peripheral Vascular Disease 

No Poorly-Controlled Peripheral Vascular Disease ............................................................................................................ 1.00 

Yes Poorly-Controlled Peripheral Vascular Disease ........................................................................................................... 1.07 

Poorly-Controlled Pulmonary Disorder 

No Poorly-Controlled Pulmonary Disorder .......................................................................................................................... 1.00 


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TABLE 61—IMPACT OF THE PDGM FOR SELECTED PATIENT CHARACTERISTICS—Continued 

Ratio of average PDGM 

payment to average 

current (30-day 

equivalent) payment 

Yes Poorly-Controlled Pulmonary Disorder ......................................................................................................................... 1.03 

Open Wound/Lesion 

No Open Wound/Lesion ...................................................................................................................................................... 0.98 

Yes Open Wound/Lesion ..................................................................................................................................................... 1.10 

Temporary Health Risk 

No Temporary Health Risk .................................................................................................................................................. 0.99 

Yes Temporary Health Risk ................................................................................................................................................ 1.02 

Fragile/Serious Health Risk 

Yes Fragile/Serious Health Risk .......................................................................................................................................... 0.98 

No Fragile/Serious Health Risk ........................................................................................................................................... 1.04 

Note(s): **For this table only**, payments are for normal episodes and do not include outlier payments. For comparability with the 30-day 

PDGM, current payments have been halved from 60-day amounts to simulate 30-day payments. PDGM payments have been normalized so that 

national average 30-day payments equaled the 30-day current system equivalent payment to facilitate an understanding of reallocation of payments from the current system. For the ratio of PDGM to current payments in the right-hand column, a value greater than one signifies that characteristic would receive increased payment and a value less than one would signify that characteristic would receive lesser payment, all else 

equal, in the PDGM. To be classified as Poorly Controlled Cardiac Dysrhythmia, Diabetes, Peripheral Vascular Disease, or Pulmonary Disorder 

required one of the following respective primary or secondary diagnosis codes with an accompanying recorded ‘‘poorly-controlled’’ degree of 

symptom control: Cardiac Dysthymia: ICD–10 I–21–I22.9 & I47–I49; Diabetes: E08.0–E08.8, E09.0–E09.8, & E10–E14; Peripheral Vascular Disease: ICD–10 I73; and Pulmonary Disorder: (I40–47, J84.01, J84.02, J84.03, J84.10, J96.0–J96.92, & J98.01–J98.3). 

2. HHVBP Model 

Table 62 displays our analysis of the 

distribution for possible payment 

adjustments at the maximum 7-percent, 

and 8-percent rates that will be used in 

Years 4 and 5 of the Model. These 

analyses use performance year data from 

2016, the first year of HHVBP, the most 

recent year for which complete 

performance year data are available. The 

estimated impacts are for the following 

proposed changes, each of which would 

take effect beginning with PY4 (2019): 

• Remove two OASIS-based measures 

(Influenza Immunization Received for 

Current Flu Season and Pneumococcal 

Polysaccharide Vaccine Ever Received); 

• Replace three OASIS-based 

measures (Improvement in Bathing, 

Improvement in Bed Transferring, and 

Improvement in AmbulationLocomotion) with two composite 

measures (Total Change in Self Care, 

Total Change in Mobility). The two 

composite measures would have a 

maximum score of 15 points; 

• Reduce the maximum possible 

improvement points from 10 to 9 (13.5 

for the two composite measures); and, 

• Change the weights given to the 

performance measures used in the 

Model so that the OASIS and claimsbased measures each count for 35 

percent and the HHCAHPS measures 

count for 30 percent of the 90 percent 

of the Total Performance Score (TPS) 

that is based on performance on the 

Clinical Quality of Care, Care 

Coordination and Efficiency, and Person 

and Caregiver-Centered Experience 

measures. Data reporting for each New 

Measure would continue to have equal 

weight and account for the 10 percent 

of the TPS that is based on the New 

Measures collected as part of the Model. 

The weight of the unplanned 

hospitalization measure would also be 

increased so that it has three times the 

weight of the ED use without 

hospitalization measure. 

We analyzed the payment adjustment 

percentage and the number of eligible 

HHAs under current policy to determine 

the impacts if the proposed changes in 

this rule were finalized. We used PY1 

(CY2016) data to measure the impacts. 

The data sources for these analyses are 

data from the QIES system for the 

existing OASIS and claims-based 

measures, OASIS assessments for the 

two composite measures, HHCAHPS 

data received from the HHCAHPS 

contractor, and New Measure data 

submitted by Model participants. HHAs 

are classified as being in the smaller or 

larger volume cohort using the 2016 

Quality Episode File, which is created 

using OASIS assessments. We note that 

this impact analysis is based on the 

aggregate value across all nine Model 

states. 

Table 63 displays our analysis of the 

estimated impact of the proposals in 

this rule on the number of eligible 

HHAs and the distribution of percentage 

change in payment adjustment 

percentage based on the same PY1 

(CY2016) data used to calculate Table 

62. We note that this impact analysis is 

based on the aggregate value across all 

nine Model states. Note that all 

Medicare-certified HHAs that provide 

services in Massachusetts, Maryland, 

North Carolina, Florida, Washington, 

Arizona, Iowa, Nebraska, and Tennessee 

are required to compete in this Model. 

The analysis is calculated at the state 

and size cohort level. It is expected that 

a certain number of HHAs would not 

have a payment adjustment because 

they may be servicing too small of a 

population to report an adequate 

number of measures to calculate a TPS. 

Table 63 shows that there would be a 

reduction in the number of HHAs that 

would have a sufficient number of 

measures to receive a payment 

adjustment for performance year 4 of 31 

HHAs (Change column), a decrease from 

1,610 HHAs (Current column) to 1,579 

HHAs (Simulated column) across the 

nine selected states. 

This analysis reflects only HHAs that 

would have data for at least five 

measures that meet the requirements of 

§ 484.305 and would be included in the 

LEF and would have a payment 

adjustment calculated. Value-based 

incentive payment adjustments for the 

estimated eligible 1,579 HHAs in the 

selected states that would compete in 

the HHVBP Model are stratified by size 

as described in section IV.B. of the CY 

2017 HH PPS final rule. As finalized in 


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32502 Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules 

section IV.B. of the CY 2017 final rule, 

there must be a minimum of eight HHAs 

in any cohort. 

Those HHAs that are in states that do 

not have at least eight smaller-volume 

HHAs will not have a separate smallervolume cohort and thus there will only 

be one cohort that will include all the 

HHAs in that state. As indicated in 

Table 63, Maryland, North Carolina, 

Tennessee, Washington, and Arizona 

would have only one cohort while 

Florida, Iowa, Massachusetts, and 

Nebraska would have both a smallervolume cohort and a larger-volume 

cohort. For example, Iowa would have 

17 HHAs eligible to be exempt from 

being required to have their 

beneficiaries’ complete HHCAHPS 

surveys because they provide HHA 

services to less than 60 beneficiaries. 

Therefore, those 17 HHAs would be 

competing in Iowa’s smaller-volume 

cohort for CY 2019 (PY4) under the 

Model. 

Table 63 shows the distribution of 

percentage change in payment 

adjustment percentage resulting from 

the proposals in this rule. Using 2016 

data and the maximum payment 

adjustment for performance year 4 of 7 

percent (as applied in CY 2021), based 

on the six proposed OASIS quality 

measures and two claims-based 

measures in QIES, the five HHCAHPS 

measures, and the three New Measures, 

we see that, across all nine states, 31 

HHAs would no longer be eligible for a 

payment adjustment for PY4 because 

they would not have data on at least five 

measures that meet the requirements of 

§ 484.305. The distribution of scores by 

percentile shows the distribution of the 

change in percent payment adjustment. 

For example, the distribution for HHAs 

in Florida in the smaller-volume cohort 

ranges from ¥2.5 percent at the 10th 

percentile to +2.9 percent at the 90th 

percentile. This means that, for 7 of the 

77 HHAs in the smaller-volume cohort 

in Florida, the proposed changes would 

decrease their payment adjustment 

percentage by ¥2.5 percent or more 

while, for another 7 HHAs these 

proposed changes would increase their 

payment adjustment percentage by 2.9 

percent or more. For half of the HHAs 

in Florida’s smaller volume cohort, the 

impact of these proposed changes on 

their payment adjustment percentage 

would be between ¥1.1 percent and 

+1.3 percent. These impact analyses 

suggest that, for most participating 

HHAs, the impacts of the proposed 

changes would be modest. 

Table 64 provides the payment 

adjustment distribution based on agency 

size, proportion of dually-eligible 

beneficiaries, average case mix (using 

the average case-mix for non-LUPA 

episodes), the proportion of the HHA’s 

beneficiaries that reside in rural areas 

and HHA organizational status. HHAs 

with a higher proportion of duallyeligible beneficiaries and HHAs whose 

beneficiaries have higher acuity tend to 

have a more negative impact associated 

with the proposals in this rule based on 

the 50th percentile of the impact of the 

changes on payment adjustment 

percentage. 

Table 65 shows the current and 

proposed weights for individual 

performance measures by measure 

category and possible applicable 

measure category scenarios to 

demonstrate the weight of the 

individual measures when an HHA has 

scores on All Measures or if an HHA is 

missing all measures in a measure 

category. For example, for an HHA that 

has quality measure scores on All 

Measures in all the measure categories 

(OASIS-based, claims-based and 

HHCAHPS) under the current weighting 

method, the individual measures are 

weighted equally. The Proposed 

Weights columns show the proposed 

weights for the individual performance 

measures based on the changes to the 

weighting methodology proposed in this 

rule. For example, for HHAs with scores 

on All Measures, the OASIS-based 

measures account for 35 percent of the 

TPS, with equal weighting given to the 

Improvement in Oral Medications, 

Improvement in Dyspnea, Improvement 

in Pain, and Discharge to Community 

measures. The proposed Composite 

Self-Care and Composite Mobility 

measures would be weighted 1.5 times 

more than the other OASIS-based 

measures so that the maximum score for 

the two composite measures is the same 

as for the three functional OASIS-based 

measures that they would replace 

(Improvement in Ambulation, Bathing 

and Bed Transferring). Under the 

proposed weights, the two claims-based 

measures, which would collectively 

account for 35 percent of an HHA’s TPS, 

would not be weighted equally. We are 

proposing that the weight of the acute 

care hospitalization measure would be 

three times higher than that of the ED 

Use measure. Thus, its weight would be 

26.25 percent while the weight of the 

ED Use measure would be 8.75 percent 

for an HHA that reported on all 

measures. The HHCAHPS measures 

would account for 30 percent of an 

HHA’s TPS and each measure would be 

weighted equally. 

Table 65 also shows the number of 

HHAs that would have enough 

measures to receive a payment 

adjustment under each possible scoring 

scenario under both the current and 

proposed weighting methodologies. 

Most of the HHAs that would no longer 

receive a payment adjustment with the 

proposed changes in this rule are those 

with no claims or HHCAHPS measures. 

With only OASIS measures, these HHAs 

are more impacted by the proposal to 

remove the two immunization measures 

and the proposal to replace three OASIS 

functional measures with the two 

composite measures. The number of 

HHAs without claims or HHCAHPS 

measures that do not have enough 

measures to receive a payment 

adjustment would drop from 99 to 73 (a 

decrease of 26 HHAs), and the majority 

of the HHAs that would no longer have 

a payment adjustment would be smaller 

HHAs (16 of the 26 HHAs). 

BILLING CODE 4120–01–P 


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TABLE 62: ADJUSTMENT DISTRIBUTION BY PERCENTILE LEVEL OF QUALITY TOT

SCORE AT DIFFERENT MODEL PAYMENT ADJUSTMENT RATES (PERCENT

Percentile 

Maximum 

Payment 

Payment Adj. Adjustment 

Distribution Percentage 10% 20% 30% 40% Median 60% 70% 

7% Payment Adj. For PY 4 of the Model 7% -3.3% -2.4% -1.7% -0.9% -0.2% 0.5% 1.2% 

8%PaymentAdj. ForPY5 

of the Model 8% -3.8% -2.8% -1.9% -1.0% -0.3% 0.5% 1.4% 

EP12JY18.011</GPH>amozie on DSK3GDR082PROD with PROPOSALS2

TABLE 63: HHA COHORT PAYMENT ADJUSTMENT DISTRIBUTIONS BY 

[Based on a 7-percent payment adjustment] 

Number of Eligible HHAs Distribution of Percentage Change 

Percentage Resulting From P

State Cohort Current Simulated Change lOth 25th 50th 

Percentile Percentile Percentile 

All 1610 1579 31 -2.1% -1.0% -0.1% 

HHAs with no separate small HHA cohort 

AZ All 113 112 1 -2.7% -1.4% -0.1% 

MD All 51 50 1 -1.7% -0.6% -0.3% 

NC All 163 163 0 -1.6% -0.8% 0.0% 

TN All 122 122 0 -1.2% -0.7% 0.2% 

WA All 57 57 0 -1.3% -0.8% 0.0% 

Large-volume HHA Cohort in states with small cohort 

FL Large 706 703 3 -2.3% -1.2% -0.2% 

lA Large 99 97 2 -1.9% -1.2% -0.2% 

MA Large 123 119 4 -2.0% -1.1% -0.4% 

NE Large 45 45 0 -2.8% -0.9% -0.3% 

Small-volume HHA Cohort in states with small cohort 

FL Small 77 68 9 -2.5% -1.1% 0.1% 

lA Small 25 17 8 0.1% 1.3% 2.9% 

MA Small 15 12 3 -1.4% -0.5% 0.3% 

NE Small 14 14 0 -3.0% -1.0% 0.0% 

EP12JY18.012</GPH>amozie on DSK3GDR082PROD with PROPOSALS2

TABLE 64: PAYMENT ADJUSTMENT DISTRIBUTIONS BY CHARACTERISTICS FOR THE 

[Based on a 7-percent payment adjustment 1• 

2

] 

Number of Eligible HHAs Distribution of Percentage Change in Pay

Percentage Resulting From Propose

Cohort Current Simulated Change lOth 25th 50th 7

Percentile Percentile Percentile Per

Facility size 

( # of patients) 

SmallHHA 136 117 19 -3.2% -1.6% -0.2% 

LargeHHA 1474 1462 12 -2.0% -1.0% -0.1% 

Percentage of Medicaid patients 

No Medicaid 749 743 6 -2.2% -1.1% -0.1% 

>0 and< 30% Medicaid 661 653 8 -1.7% -0.9% 0.0% 

30%+ Medicaid 200 183 17 -2.6% -1.4% -0.4% 

Patient acuity 

Low Acuity 403 384 19 -2.2% -1.0% -0.1% 

Medium Acuity 805 798 7 -1.8% -0.9% 0.0% 

High Acuity 402 397 5 -2.3% -1.3% -0.3% 

Percentage of rural beneficiaries 

None 1482 1458 24 -2.1% -1.1% -0.1% 

>0 and< 90% 11 10 1 -4.1% -1.1% -0.4% 

>=90% 117 111 6 -1.7% -0.9% 0.2% 

Facility type and control 

Non-profit 310 308 2 -1.4% -0.8% 0.2% 

For profit 1191 1169 22 -2.2% -1.1% -0.2% 

Government 109 102 7 -1.9% -0.9% 0.0% 

Freestanding 1448 1419 29 -2.1% -1.1% -0.2% 

Facility -based 162 160 2 -1.2% -0.5% 0.2% 

Rural beneficiaries identified based on the CBSA code reported on the clmm. 

2 Acuity is based on the average case-mx weight for non-LUPA episodes. Low acuity is defined as the bottom 25% (among H

acuity is the middle 50% and high acuity is the highest 25%. 
BILLING CODE 4120–01–C 


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TABLE 65: CURRENT AND PROPOSED WEIGHTS FOR INDIVIDUAL PERFORMANCE MEAS

HHVBP MODEL 1234 

Current \Veiohts Propo•ed Weights: All Chanues Proposed Wei

All No No claims or All No No claims or All 

Measures HHCAHPS claims HHCAHPS Measures HHCAHPS claims HHCAHPS Measures H

/"arf<e I !!!As 11!23 31!2 21! 49 11!23 31!0 21! 39 

SmallHHAs 3 83 0 50 3 80 0 34 

OASIS (35% wei!!ht)* 

Flu vaccine ever received** 6.25%) 9.09% 7.14% 11.11% 0.00% 0.00% 0.00% 0.00% 3.89% Pnemnococcal vaccine** G.25% 9.09% 7.14% 11.11% 0.00% 0.00% 0.00% 0.00% 3.89% 

Improve !lathing*** 6.2Y% 9.09% 7.14°/() 11.11%) 0.00% 0.()0% 0.()0% 0.00% l.X9°/(, 

Improve Bed Transfer*** 6.25% 9.09% 7.14% 11.11% 0.00% 0.00% 0.00% 0.00% 3.89% Improve Ambulation* ** 6.25% 9.09% 7.14% 11.11% 0.00% 0.00% 0.00% 0.00% 3.89% Improve Oral Meds 6.25%) 9.09% 7.14% 11.11% 5.00% 7.14% 7.69% 14.28% 3.89% Improve Dyspnea G.25% 9.09% 7.14% 1111% 5.00% 7.14% 7.G9% 14.28% 3.89% 

Improve Paln 6.2Y% 9.09% 7.14°/() 11.11%) 5.00% 7.69°/() 14.2X%, l.X9°/(, 

Discharge to Comlllunity 6.25% 9.09% 7.14% 11.11% 5.00% 7.14% 7.69% 14.28% 3.89% 

Composite self-care 0.00% 0.00% 0.00% 0.00% 7.50% 10.71% 11.53% 21.42% 0.00% Composite mobility 0.00% 0.00% 0.00% 0.00% 7.50% 10.71% 11.53% 21.42% 0.00% 

Total weight for OASIS 

measures 56.25% 81.82% 64.26% 100.00% 35.00% 49.98% 53.82% 99.96% 35.00% 

Claims (35% weieht) 

Hospitalizations 9.09% 0.00% 0.00% 37.50% 0.00% 0.00% 26.25% 

Outpatient EO 6.25%) 9.09'!/o O.OO'YO 0.00'% 8.75'% 12.50'Yo O.OO'YO 0.00'% 

Total we;ghtfor clmms 

measures 12.50% 18.18% 0.00% 0.00% 35.00% 50.00% 0.00% 0.00% 35.00% 

HHCAHPS (30% 

Care of patients 6.25% 0.00% 7.14% 0.00% 6.00% 0.00% 9.23% 0.00% 6.00% Cotnmunication between 

provider and patient 0.00% 7.14% 0.00% 600% 0.00% 9.23% 0.00% 6.00% 

Dlscusslon of specltlc care 

Issues 6.25% 0.00% 7.14% 0.00% 6.00% 0.00% 9.23% 0.00% 6.00% 

Overall rating of care 6.25% 0.00% 7.14% 0.00% 6.00% 0.00% 9.23% 0.00% 6.00% 

to reconunend 

HHA to family or friends 6.25% 0.00% 7.14% 0.00(% 6.00% 0.00% 9.23% 0.00(% 6.00% 

Total weight for HHCAHPS 

measures 31.25% 0.00% 35.70% 000% 30.00% 0.00% 46.15% 000% 30.00% 

1 Under the proposal if individual OASIS items are missing, the weight of the non-missing OASIS items would be increased. 

2 Flu vaccine ever received and the pneumococcal polysaccharide vaccine measures are proposed to be removed from the applicable me

CY 2019/PY4. 

3 Improvement in Bathing, Bed Transfer and Ambulation measures are proposed to be removed if proposed composite measures are add

measure set beginning in CY 2019/PY 4. 

4 The proposed composite measures (Composite Self-Care and Composite Mobility) would replace three functional OASIS-based meas

Bathing, Improvement in Bed Transfer, Improvement in Ambulation), thus they would be weighted 1. 5 times more than the other OASI

the total weight for the functional-based OASIS measures is tmchanged. 
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules 32507 

112Based on the 2018 Medicare PFS these rates 

are $141.12 ($74.16 + 3 * $22.32) for Category 1, 

$224.28 ($176.76 + 3 * $15.84) for Category 2, and 

$239.76 ($144.72 + 3 * $31.68) for Category 3. 

3. HH QRP 

Failure to submit data required under 

section 1895(b)(3)(B)(v) of the Act with 

respect to a calendar year will result in 

the reduction of the annual home health 

market basket percentage increase 

otherwise applicable to a HHA for that 

calendar year by 2 percentage points. 

For the CY 2018 annual payment update 

determination, 1,311 of the 11,776 

active Medicare-certified HHAs, or 

approximately 11.1 percent, did not 

receive the full annual percentage 

increase. Information is not available to 

determine the precise number of HHAs 

that would not meet the requirements to 

receive the full annual percentage 

increase for the CY 2019 payment 

determination. 

As discussed in section V.E. of this 

proposed rule, we are proposing to 

remove seven measures from the HH 

QRP: Depression Assessment 

Conducted, Diabetic Foot Care and 

Patient/Caregiver Education 

Implemented during All Episodes of 

Care, Multifactor Fall Risk Assessment 

Conducted For All Patients Who Can 

Ambulate (NQF #0537), Pneumococcal 

Polysaccharide Vaccine Ever Received, 

Improvement in the Status of Surgical 

Wounds, Emergency Department Use 

without Hospital Readmission during 

the First 30 Days of HH (NQF #2505), 

Rehospitalization during the First 30 

Days of HH (NQF #2380). All seven of 

these measures are proposed for 

removal starting with the CY 2021 HH 

QRP. As noted previously, section VII. 

of this proposed rule provides a detailed 

description of the net decrease in 

burden associated with these proposed 

changes in conjunction with the 

changes in burden that result from the 

proposed implementation of the PDGM 

for CY 2020. We estimate that the 

burden associated with OASIS item 

collection as a result of this proposed 

rule results in a net $60 million in 

annualized cost savings to HHAs, 

discounted at 7 percent relative to year 

2016, over a perpetual time horizon 

beginning in CY 2020. 

4. Home Infusion Therapy Payment 

The following analysis applies to the 

Temporary Transitional Payment for 

Home Infusion Therapy as set forth in 

section 1834(u)(7) of the Act, as added 

by section 50401 of the BBA of 2018 

(Pub. L 115–123), and accordingly, 

describes the impact for CY 2019 only. 

Table 66 represents the estimated 

increased costs of existing DME users 

currently using home infusion therapy 

services. We used CY 2017 data to 

identify beneficiaries with DME claims 

containing 1 of the 37 HCPCS codes 

identified in section 1834(u)(7)(C) of the 

Act, which are shown in column 2. In 

column 3, 2017 claims were again used 

to determine the total weeks of care, 

which is the sum of weeks of care across 

all beneficiaries found in each category. 

Weeks of care for payment categories 1 

and 3 are defined as the week of the last 

infusion drug or pump claim minus the 

week of the first infusion drug or pump 

claim plus one. For Category 2, we used 

the median number of weeks of care, 47, 

as many patients use immune globulin 

for the whole year. Column four 

assumes the initial week of care requires 

two nurse visits, and all subsequent 

weeks only require one visit, in order to 

estimate the total visits of care per 

category. In general, nursing visits for 

payment category 2, subcutaneous 

immune globulin (SCIG) administration, 

occur once per month; therefore, we 

assume the estimated number of visits 

for these patients is 12. The fifth column 

multiplies the volume of nurse visits 

across beneficiaries by the payment rate 

(using the 2018 Physician Fee Schedule 

amounts) in order to estimate the 

increased cost per each of the three 

infusion drug categories.112 In the CY 

2019 HH PPS final rule, we will update 

this impact analysis using more 

complete 2017 claims data (as of June 

30, 2018 or later) and the CY 2019 

Physician Fee Schedule amounts. 

TABLE 66—ESTIMATED INCREASED COSTS OF EXISTING DME HOME INFUSION PATIENTS NOW RECEIVING COVERED

HOME INFUSION THERAPY SERVICES, CY 2019 

Payment category Number of 

beneficiaries 

Total weeks 

of care 

Estimated total 

visits of care 

2018 

Payment rate 

Estimated 

cost 

1 ......................................................................................... 5,885 130,896 136,781 $141.12 $19,302,535 

2 ......................................................................................... 6,315 236,470 75,780 224.28 16,995,938 

3 ......................................................................................... 5,774 87,260 93,034 239.76 22,305,832

Total ............................................................................ 17,974 ........................ ........................ ........................ 58,604,305 

Table 67 displays the estimated 

regional impacts using the beneficiary 

enrollment address reported in the 

Medicare Master Beneficiary Summary 

File. Table 68 displays impacts based on 

rural or urban designations. All 

beneficiaries identified had at least one 

applicable home infusion claim (claims 

with 1 of the 37 drug codes listed in 

section 1834(u)(7)(C) of the Act) in CY 

2017. Unknown beneficiaries were those 

without valid state and county 

information in the Master Beneficiary 

Summary File. Additionally, the tables 

provide the estimated impacts by drug 

category. 

TABLE 67—ESTIMATED IMPACTS OF THE TEMPORARY TRANSITIONAL PAYMENT FOR HOME INFUSION THERAPY SERVICES

BY REGION, CY 2019 

Census Region Number of home 

infusion patients Category 1 Category 2 Category 3 Total 

New England ......................................... 719 $1,030,740.48 $866,617.92 $$263,496.24 $2,160,854.64 

Mid Atlantic ............................................ 3,503 2,699,343.36 1,582,519.68 8,670,920.40 12,952,783.44 

East North Central ................................. 2,493 3,204,976.32 1,733,235.84 3,346,330.32 8,284,542.48 

West North Central ................................ 1,296 1,192,605.12 1,351,062.72 1,644,034.32 4,187,702.16 

South Atlantic ......................................... 4,396 4,367,805.12 4,849,830.72 4,516,359.12 13,733,994.96 

East South Central ................................ 1,201 1,330,761.60 1,544,840.64 668,690.64 3,544,292.88 


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TABLE 67—ESTIMATED IMPACTS OF THE TEMPORARY TRANSITIONAL PAYMENT FOR HOME INFUSION THERAPY SERVICES

BY REGION, CY 2019—Continued 

Census Region Number of home 

infusion patients Category 1 Category 2 Category 3 Total 

West South Central ............................... 1,729 2,546,228.16 1,824,742.08 942,256.80 5,313,227.04 

Mountain ................................................ 847 978,949.44 1,404,889.92 281,957.76 2,665,797.12 

Pacific .................................................... 1,727 1,928,969.28 1,800,519.84 1,882,595.52 5,612,084.64 

Other ...................................................... 63 22,155.84 37,679.04 89,190.72 149,025.60 

Total ................................................ 17,974 19,302,534.72 16,995,938.40 22,305,831.84 58,604,304.96 

TABLE 68—ESTIMATED URBAN/RURAL IMPACTS OF THE TEMPORARY TRANSITIONAL PAYMENT FOR HOME INFUSION

THERAPY SERVICES, CY 2019 

CBSA Urban/rural Number of home 

infusion patients Category 1 Category 2 Category 3 Total 

Urban ..................................................... 14,692 $15,906,058.56 $14,495,664.96 $17,419,762.80 $47,821,486.32 

Rural ...................................................... 3,239 3,384,057.60 2,462,594.40 4,863,052.08 10,709,704.08 

Unknown ................................................ 43 12,418.56 37,679.04 23,016.96 73,114.56 

Total ................................................ 17,974 19,302,534.72 16,995,938.40 22,305,831.84 58,604,304.96 

E. Alternatives Considered 

1. HH PPS 

a. HH PPS for CY 2019 

Section 1895(b)(3)(B) of the Act 

requires that the standard prospective 

payment amounts for CY 2019 be 

increased by a factor equal to the 

applicable HH market basket update for 

those HHAs that submit quality data as 

required by the Secretary. For CY 2019, 

Section 1895(b)(3)(B)(vi) of the Act 

requires that the market basket update 

under the HHA prospective payment 

system be annually adjusted by changes 

in economy-wide productivity. The 

proposed 0.7 percentage point 

multifactor productivity adjustment to 

the proposed CY 2019 home health 

market basket update of 2.8 percent, is 

discussed in the preamble of this rule 

and is not discretionary as it is a 

requirement in section 

1895(b)(3)(B)(vi)(I) of the Act. 

We considered not rebasing the home 

health market basket. However, we 

believe that it is desirable to rebase the 

home health market basket periodically 

so that the cost category weights reflect 

changes in the mix of goods and 

services that HHAs purchase in 

furnishing home health care. In 

addition, we considered not 

implementing the proposed revision to 

the labor-related share of 76.1 percent in 

a budget neutral manner. However, we 

believe it is more prudent to implement 

the revision to the labor-related share in 

a manner that does not increase or 

decrease budgetary expenditures. 

With regards to payments made under 

the HH PPS for high-cost outlier 

episodes of care (that is, episodes of care 

with unusual variations in the type or 

amount of medically necessary care), we 

did not consider maintaining the 

current FDL ratio of 0.55. As discussed 

in section III.E.3. of this proposed rule, 

we propose to revise the FDL ratio to 

0.51. Simulations using CY 2017 claims 

data and the proposed CY 2019 HH PPS 

payment rates resulted in an estimated 

2.32 percent of total HH PPS payments 

being paid as outlier payments using the 

existing methodology for calculating the 

cost of an episode of care. The FDL ratio 

and the loss-sharing ratio must be 

selected so that the estimated outlier 

payments do not exceed the 2.5 percent 

of total HH PPS payments (as required 

by section 1895(b)(5)(A) of the Act). We 

did not consider proposing a change to 

the loss sharing ratio (0.80) in order for 

the HH PPS to remain consistent with 

payment for high-cost outliers in other 

Medicare payment systems (for 

example, IRF PPS, IPPS, etc.) 

b. HH PPS for CY 2020 (PDGM) 

For CY 2020, we did not consider 

alternatives to changing the unit of 

payment from 60 days to 30 days, 

eliminating the use of therapy 

thresholds for the case-mix adjustment, 

and requiring the revised payments to 

be budget neutral. Section 51001 of the 

BBA of 2018 requires the change in the 

unit of payment from 60 days to 30 days 

to be made in a budget neutral manner 

and mandates the elimination of the use 

of therapy thresholds for case-mix 

adjustment purposes. The BBA of 2018 

also requires these measures to be 

implemented on January 1, 2020 and 

that we make assumptions about 

behavior changes that could occur as a 

result of the implementation of the 30- 

day unit of payment and as a result of 

the case-mix adjustment factors that are 

implemented in CY 2020 in calculating 

a 30-day payment amount for CY 2020 

in a budget neutral manner. 

Alternatives to making 19 current 

OASIS items (48 data elements) optional 

at the FU time point as outlined in 

section VII. of this proposed rule, would 

be to either not implement the case-mix 

adjustment methodology changes 

proposed under the PDGM or to 

continue collecting the 19 current 

OASIS items at the FU time point, even 

though they would not be used to casemix adjust payments under the PDGM. 

Similarly, an alternative to adding 

collection of two current OASIS items 

(10 data elements) at the FU time point 

as discussed in section VII. of this 

proposed rule would be to either not 

adopt the PDGM or not to include the 

two current OASIS items (M1800 and 

M1033) as part of the case-mix 

adjustment methodology under the 

proposed PDGM. As noted previously, 

we did not consider not implementing 

the case-mix methodology changes 

under the proposed PDGM as a new 

case-mix adjustment methodology is 

required to be implemented in 

accordance with section 51001 of the 

BBA of 2018, which mandates the 

elimination of the use of therapy 

thresholds for case-mix adjustment 

purposes by January 1, 2020. We believe 

that continuing to require HHAs to 

report responses for the 19 current 

OASIS items at the FU time point that 

are no longer needed for case-mix 

adjustment purposes under the PDGM 

results in unnecessary burden for HHAs. 


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While requiring HHAs to report 

responses for two current OASIS items 

at the FU time point results in a small 

increase in burden if CMS were to not 

make 19 current OASIS items optional 

at the FU time point, those two OASIS 

items (M1800 and M1033) are correlated 

with increases in resource use and are 

used to determine the patient’s 

functional impairment level under the 

HHGM, thus they are important for casemix adjustment purposes in order to 

ensure accurate payments to HHAs 

under the proposed PDGM. 

We considered whether to continue 

using the wage-weighted minutes of 

care (WWMC) approach to estimate 

resource use under the PDGM, as 

described in section III.F.2. of this 

proposed rule. Although the 

relationship in relative costs between 

the WWMC approach and the proposed 

cost-per-minute plus non-routine 

supplies (CPM + NRS) approach is very 

similar (correlation coefficient equal to 

0.8512), the WWMC approach does not 

as evenly weight skilled nursing costs 

relative to therapy costs as evidenced in 

the cost report data and would require 

us to maintain a separate case-mix 

adjustment mechanism for NRS. If we 

were to maintain the current WWMC 

approach, skilled nursing and therapy 

costs would not be as evenly weighted 

and a certain level of complexity in 

calculating payments under the HH PPS 

would persist as we would need to 

continue with the current method of 

case-mix adjusting NRS payments 

separate from service costs (that is, 

skilled nursing, physical therapy, 

occupational therapy, speech-language 

pathology, home health aide, and 

medical social services) under the HH 

PPS. 

In this proposed rule and to begin in 

CY 2020, we considered proposing a 

phase-out of the split percentage 

payment approach by reducing the 

percentage of the upfront payment over 

a period of time and requiring a notice 

of admission (NOA) to be submitted 

upon full elimination of the splitpercentage payment. However, we 

wanted to take the opportunity in this 

year’s rule to more clearly signal our 

intent to potentially eliminate the split 

percentage payment approach over time 

as a reduced timeframe for the unit of 

payment (30 days rather than 60 days) 

is now required in statute. Given that 

existing HHAs (certified with effective 

dates prior to January 1, 2019) would 

need to adapt to changes in cash flow 

with the elimination of the split 

percentage payment approach, we hope 

to receive additional feedback on the 

timeframes for a phase-out of the split 

percentage payment approach and 

whether there is a need for an NOA 

upon completion of a phase-out of the 

split percentage payment approach that 

we can take into consideration for 

potential future rulemaking. 

2. HHVBP Model 

An alternative to our proposal to 

remove the two vaccination measures 

beginning with PY 4 would be to 

continue to include them in the 

applicable measure set. 

An alternative to our proposal to 

replace three OASIS-based measures 

with two proposed composite measures 

would be to make no changes to the 

OASIS-based measures category. 

Another alternative to this proposal 

would be to finalize one but not both 

composite measures. All three of the 

ADL measures that would be replaced 

(Improvement in Bathing, Improvement 

in Bed Transferring, Improvement in 

Ambulation-Locomotion) relate to the 

normalized change in self-care measure, 

so, if only the self-care measure were 

adopted it would replace the three 

individual ADL items and count for 30 

points. If only the mobility composite 

measure were adopted, however, it 

would count for 15 points and the three 

individual measures (which would not 

be dropped) would count for 5 points 

each. That would keep the relative 

points for the ADL measures at 30 no 

matter which option were adopted. 

An alternative to rescoring the 

maximum improvement points from 10 

points to 9 points would be to keep the 

current scoring methodology. 

An alternative to reweighting the 

OASIS-based, claims-based and 

HHCAHPS measure categories would be 

to keep the current equally weighted 

methodology. 

3. HH QRP 

An alternative to removing seven 

measures from the HH QRP (Depression 

Assessment Conducted, Diabetic Foot 

Care and Patient/Caregiver Education 

Implemented during All Episodes of 

Care, Multifactor Fall Risk Assessment 

Conducted For All Patients Who Can 

Ambulate (NQF #0537), Pneumococcal 

Polysaccharide Vaccine Ever Received, 

Improvement in the Status of Surgical 

Wounds, Emergency Department Use 

without Hospital Readmission during 

the First 30 Days of HH (NQF #2505), 

Rehospitalization during the First 30 

Days of HH (NQF #2380)), as discussed 

in section V.E. of this proposed rule 

would be to retain these measures in the 

HH QRP. 

4. Home Infusion Therapy 

a. Health and Safety Standards 

We considered establishing additional 

requirements related to patient 

assessment, infection control and 

quality improvement. However, 

according to the home infusion therapy 

supplier industry, and our research, we 

believe there are already AO standards 

that include requirements related to 

patient assessment, quality 

improvement, and infection control. 

While the exact content of the AO 

standards vary, we believe that the 

standards are adequate to ensure basic 

patient health and safety. 

b. Payment 

We did not consider alternatives to 

implementing the home infusion 

therapy benefit for CY 2019 and 2020 

because section 1834(u)(7) of the Act 

requires the Secretary to provide a 

temporary transitional payment to 

eligible home infusion therapy suppliers 

for items and services associated with 

the furnishing of transitional home 

infusion drugs. 

c. Accreditation of Qualified Home 

Infusion Therapy Suppliers 

AOs that accredit home infusion 

therapy suppliers must become 

accredited by an AO designated by the 

Secretary. In these options, we have 

attempted to minimize the burden of 

accreditation on home infusion therapy 

suppliers, which include approving 

home infusion therapy AOs that 

consider the unique needs of small 

home infusion therapy suppliers. Also, 

it is likely that the surveys of home 

infusion therapy suppliers would be 

performed as a desk review instead of 

an onsite survey. Doing a desk audit 

survey would prevent the travel time 

and cost that is required when the AO 

has to send a survey team to the home 

infusion therapy supplier’s location to 

perform an onsite survey. 

F. Accounting Statement and Tables 

As required by OMB Circular A–4 

(available at http://

www.whitehouse.gov/omb/circulars_

a004_a-4), in Table 69, we have 

prepared an accounting statement 

showing the classification of the 

transfers and costs associated with the 

CY 2019 HH PPS provisions of this rule. 

For CY 2020, due to the section 51001(a) 

of the BBA of 2018 requirement that the 

transition to the 30-day unit of payment 

be budget neutral, Table 70 displays a 

transfer of zero. Table 71 provides our 

best estimates of the changes to OASIS 

item collection as a result of the 

proposed implementation of the PDGM 


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and proposed changes to the HH QRP. 

Table 72 provides our best estimate of 

the increase in Medicare payments to 

home infusion therapy suppliers related 

to the temporary transitional payment 

for home infusion therapy in CY 2019. 

Table 73 provides our best estimate of 

cost of AO compliance with our 

proposed home infusion the Infusion 

Therapy requirements. 

TABLE 69—ACCOUNTING STATEMENT: 

HH PPS CLASSIFICATION OF ESTIMATED TRANSFERS, FROM CY 2018 

TO 2019 

Category Transfers 

Annualized Monetized 

Transfers.

$400 million. 

From Whom to Whom? .... Federal Government to HHAs. 

TABLE 70—ACCOUNTING STATEMENT: 

HH PPS CLASSIFICATION OF ESTIMATED TRANSFERS DUE TO THE

PDGM PROPOSALS, FROM CY 2019 

TO 2020 PDGM 

Category Transfers 

Annualized Monetized 

Transfers.

$0 million. 

From Whom to Whom? .... HHAs to Federal 

Government. 

TABLE 71—ACCOUNTING STATEMENT: 

CLASSIFICATION OF ESTIMATED

COSTS OF OASIS ITEM COLLECTION, FROM CY 2019 TO CY 2020 

Category Costs 

Annualized Monetized Net 

Burden for HHAs’ Submission of the OASIS.

¥$60 million 

TABLE 72—ACCOUNTING STATEMENT: 

TEMPORARY TRANSITIONAL PAYMENT FOR HOME INFUSTION THERAPY CLASSIFICATION OF ESTIMATED

TRANSFERS, FROM CY 2018 TO 

2019 

Category Transfers 

Annualized Monetized 

Transfers.

$60 million. 

From Whom to Whom? .... Federal Government to Home 

Infusion Therapy Suppliers. 

TABLE 73—ACCOUNTING STATEMENT: 

CLASSIFICATION OF ESTIMATED

COSTS FOR HOME INFUSION THERAPY ACCREDITATION ORGANIZATIONS, FROM CY 2019 TO CY 2020 

Category Costs 

Annualized Monetized Net 

Burden to Each Home Infusion Therapy AO for 

Compliance with the Proposed Regulations at 

§§ 488.1010 through 

488.1050 ........................... $23,258. 

G. Regulatory Reform Analysis Under 

E.O. 13771 

Executive Order 13771, entitled 

‘‘Reducing Regulation and Controlling 

Regulatory Costs,’’ was issued on 

January 30, 2017 and requires that the 

costs associated with significant new 

regulations ‘‘shall, to the extent 

permitted by law, be offset by the 

elimination of existing costs associated 

with at least two prior regulations.’’ 

Details on the estimated costs of this 

proposed rule, including limitations on 

the ability thus far to quantify some 

categories of impacts, can be found in 

the rule’s economic analysis. The 

determination of this proposed rule’s 

status as a regulatory or deregulatory 

action for the purposes of Executive 

Order 13771 will be informed by 

comments received in response to this 

proposed rulemaking. 

H. Conclusion 

1. HH PPS 

a. HH PPS for CY 2019 

In conclusion, we estimate that the 

net impact of the HH PPS policies in 

this rule is an increase of 2.1 percent, or 

$400 million, in Medicare payments to 

HHAs for CY 2019. The $400 million 

increase reflects the effects of the CY 

2019 home health payment update of 

2.1 percent ($400 million increase), a 

0.1 percent increase in payments due to 

decreasing the FDL ratio in order to 

target to pay no more than 2.5 percent 

of total payments as outlier payments 

($20 million increase), and a ¥0.1 

percent decrease in CY 2019 payments 

due to the new rural add-on policy 

mandated by the BBA of 2018 ($20 

million decrease). 

b. HH PPS for CY 2020 (PDGM) 

In conclusion, we estimate that 

Medicare payments to HHAs for CY 

2020 will remain the same compared to 

CY 2019 as a result of the 

implementation of the PDGM. Section 

51001(a) of the BBA of 2018 requires the 

Secretary to implement the 30-day unit 

of payment in a budget-neutral manner. 

2. OASIS Changes Related to the HH 

QRP and HH PPS (PDGM) for CY 2020 

In conclusion, we estimate that the 

changes to OASIS item collection as a 

result of the proposed changes to the 

HH QRP and the proposed changes to 

the HH PPS (PDGM), both effective on 

and after January 1, 2020, would result 

in a net $60 million in annualized cost 

savings, discounted at 7 percent relative 

to year 2016, over a perpetual time 

horizon beginning in CY 2020. 

3. HHVBP Model 

In conclusion, we estimate there 

would be no net impact (to include 

either a net increase or reduction in 

payments) in this proposed rule in 

Medicare payments to HHAs competing 

in the HHVBP Model for CY 2019. 

However, the overall economic impact 

of the HHVBP Model is an estimated 

$378 million in total savings from a 

reduction in unnecessary 

hospitalizations and SNF usage as a 

result of greater quality improvements 

in the home health industry over the life 

of the HHVBP Model. We do not believe 

the changes proposed in this rule would 

affect the prior estimates. 

4. Home Infusion Therapy 

a. Health and Safety Standards 

In summary, the proposed health and 

safety standards would not have any 

economic impact on home infusion 

therapy suppliers or accreditation 

organizations. 

b. Payment 

In conclusion, we estimate that the 

net impact of the temporary transitional 

payment to eligible home infusion 

suppliers for items and services 

associated with the furnishing of 

transitional home infusion drugs would 

result in approximately $60 million in 

additional Medicare payments to home 

infusion suppliers in CY 2019. 

c. Accreditation of Qualified Home 

Infusion Therapy Suppliers 

In summary, AOs that accredit HIT 

suppliers must become accredited by an 

AO designated by the Secretary. In these 

options, we have attempted to minimize 

the burden of accreditation on HIT 

suppliers, which include approving 

AOs that consider the unique needs of 

small HIT suppliers. Also, it is likely 

that the surveys of HIT suppliers will be 

performed as a desk review instead of 

an onsite survey. Doing a desk audit 

survey would prevent the travel time 

and cost that is required when the AO 

has to send a survey team to the HIT 


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supplier’s location to perform an onsite 

survey. 

This analysis, together with the 

remainder of this preamble, provides an 

initial Regulatory Flexibility Analysis. 

In accordance with the provisions of 

Executive Order 12866, this proposed 

rule was reviewed by the Office of 

Management and Budget. 

List of Subjects 

42 CFR Part 409 

Health facilities, Medicare. 

42 CFR Part 424 

Emergency medical services, Health 

facilities, Health professions, Medicare, 

and Reporting and recordkeeping 

requirements. 

42 CFR Part 484 

Health facilities, Health professions, 

Medicare, and Reporting and 

recordkeeping requirements. 

42 CFR Part 486 

Grant programs-health, Health 

facilities, Medicare, Reporting and 

recordkeeping requirements, X-rays. 

42 CFR Part 488 

Administrative practice and 

procedure, Health facilities, Medicare, 

Reporting and recordkeeping 

requirements. 

For the reasons set forth in the 

preamble, the Centers for Medicare & 

Medicaid Services proposes to amend 

42 CFR chapter IV as set forth below: 

PART 409—HOSPITAL INSURANCE 

BENEFITS 

■ 1. The authority citation for part 409 

continues to read as follows: 

Authority: Secs. 1102 and 1871 of the 

Social Security Act (42 U.S.C. 1302 and 

1395hh). 

§ 409.43 [Amended] 

■ 2. Section 409.43 is amended— 

■ a. By removing paragraph (c)(2); 

■ b. By resignating paragraphs (c)(3) and 

(4) as paragraphs (c)(2) and (3); 

■ c. In newly redesignated paragraph 

(c)(2)(ii) by removing the phrase ‘‘for 

services is submitted for the final 

percentage prospective payment’’ and 

adding in its place the phrase ‘‘(for 

episodes beginning on or before 

December 31, 2019) or 30-day period 

(for periods beginning on or after 

January 1, 2020) is submitted’’; and 

■ d. In paragraph (e)(1)(iii) by removing 

the phrase ‘‘during the 60-day episode’’ 

and adding in its place the phrase 

‘‘within 60 days’’. 

■ 3. Section 409.46 is amended by 

adding paragraph (e) to read as follows: 

§ 409.46 Allowable administrative costs. 

* * * * * 

(e) Remote patient monitoring. 

Remote patient monitoring is defined as 

the collection of physiologic data (for 

example, ECG, blood pressure, or 

glucose monitoring) digitally stored and 

transmitted by the patient or caregiver 

or both to the home health agency. If 

remote patient monitoring is used by the 

home health agency to augment the care 

planning process, the costs of the 

equipment and service related to this 

system are allowable administrative 

costs. 

PART 424—CONDITIONS FOR 

MEDICARE PAYMENT 

■ 4. The authority citation for part 424 

continues to read as follows: 

Authority: Secs. 1102 and 1871 of the 

Social Security Act (42 U.S.C. 1302 and 

1395hh). 

■ 5. Section 424.22 is amended by 

revising paragraphs (b)(2) and (c) to read 

as follows: 

§ 424.22 Requirements for home health 

services. 

* * * * * 

(b) * * * 

(2) Content and basis of 

recertification. As a condition for 

payment of home health services under 

Medicare Part A or Medicare Part B, if 

there is a continuing need for home 

health services, a physician must 

recertify the patient’s continued 

eligibility for the home health benefit as 

outlined in sections 1814(a)(2)(C) and 

1835(a)(2)(A) of the Act, as set forth in 

paragraph (a)(1) of this section, and as 

specified in paragraphs (b)(2)(i) and (ii) 

of this section. 

(i) Need for occupational therapy may 

be the basis for continuing services that 

were initiated because the individual 

needed skilled nursing care or physical 

therapy or speech therapy. 

(ii) If a patient’s underlying condition 

or complication requires a registered 

nurse to ensure that essential nonskilled care is achieving its purpose, 

and necessitates a registered nurse be 

involved in the development, 

management, and evaluation of a 

patient’s care plan, the physician must 

include a brief narrative describing the 

clinical justification of this need. If the 

narrative— 

(A) Is part of the recertification form, 

then the narrative must be located 

immediately prior to the physician’s 

signature. 

(B) Exists as an addendum to the 

recertification form, in addition to the 

physician’s signature on the 

recertification form, the physician must 

sign immediately following the 

narrative in the addendum. 

(c) Determining patient eligibility for 

Medicare home health services. (1) 

Documentation in the certifying 

physician’s medical records or the 

acute/post-acute care facility’s medical 

records (if the patient was directly 

admitted to home health) or both must 

be used as the basis for certification of 

the patient’s eligibility for home health 

as described in paragraphs (a)(1) and (b) 

of this section. Documentation from the 

HHA may also be used to support-the 

basis for certification of home health 

eligibility, but only if the following 

requirements are met: 

(i) The documentation from the HHA 

can be corroborated by other medical 

record entries in the certifying 

physician’s medical record for the 

patient or the acute/post-acute care 

facility’s medical record for the patient 

or both, thereby creating a clinically 

consistent picture that the patient is 

eligible for Medicare home health 

services. 

(ii)(A) The certifying physician signs 

and dates the HHA documentation 

demonstrating that the documentation 

from the HHA was considered when 

certifying patient eligibility for 

Medicare home health services. 

(B) HHA documentation can include, 

but is not limited to, the patient’s plan 

of care required under § 409.43 of this 

chapter and the initial or 

comprehensive assessment of the 

patient required under § 484.55 of this 

chapter. 

(2) The documentation must be 

provided upon request to review entities 

or CMS or both. If the documentation 

used as the basis for the certification of 

eligibility is not sufficient to 

demonstrate that the patient is or was 

eligible to receive services under the 

Medicare home health benefit, payment 

is not rendered for home health services 

provided. 

* * * * * 

PART 484—HOME HEALTH SERVICES 

■ 6. The authority citation for part 484 

continues to read as follows: 

Authority: Secs 1102 and 1871 of the Act 

(42 U.S.C. 1302 and 1395(hh)) unless 

otherwise indicated. 

■ 7. Section 484.202 is amended by 

revising the definitions of ‘‘Rural area’’ 

and ‘‘Urban area’’ to read as follows: 

§ 484.202 Definitions. 

* * * * * 

Rural area means an area defined in 

§ 412.64(b)(1)(ii)(C) of this chapter. 


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Urban area means an area defined in 

§ 412.64(b)(1)(ii)(A) and (B) of this 

chapter. 

■ 8. Section 484.205 is revised to read 

as follows: 

§ 484.205 Basis of payment. 

(a) Method of payment. An HHA 

receives a national, standardized 

prospective payment amount for home 

health services previously paid on a 

reasonable cost basis (except the 

osteoporosis drug defined in section 

1861(kk) of the Act) as of August 5, 

1997. The national, standardized 

prospective payment is determined in 

accordance with § 484.215. 

(b) Unit of payment—(1) Episodes 

before December 31, 2019. For episodes 

beginning on or before December 31, 

2019, an HHA receives a unit of 

payment equal to a national, 

standardized prospective 60-day 

episode payment amount. 

(2) Periods on or after January 1, 

2020. For periods beginning on or after 

January 1, 2020, a HHA receives a unit 

of payment equal to a national, 

standardized prospective 30-day 

payment amount. 

(c) OASIS data. A HHA must submit 

to CMS the OASIS data described at 

§ 484.55(b) and (d) in order for CMS to 

administer the payment rate 

methodologies described in §§ 484.215, 

484.220, 484. 230, 484.235, and 484.240. 

(d) Payment adjustments. The 

national, standardized prospective 

payment amount represents payment in 

full for all costs associated with 

furnishing home health services and is 

subject to the following adjustments and 

additional payments: 

(1) A low-utilization payment 

adjustment (LUPA) of a predetermined 

per-visit rate as specified in § 484.230. 

(2) A partial payment adjustment as 

specified in § 484.235. 

(3) An outlier payment as specified in 

§ 484.240. 

(e) Medical review. All payments 

under this system may be subject to a 

medical review adjustment reflecting 

the following: 

(1) Beneficiary eligibility. 

(2) Medical necessity determinations. 

(3) Case-mix group assignment. 

(f) Durable medical equipment (DME) 

and disposable devices. DME provided 

as a home health service as defined in 

section 1861(m) of the Act is paid the 

fee schedule amount. Separate payment 

is made for ‘‘furnishing NPWT using a 

disposable device,’’ as that term is 

defined in § 484.202, and is not 

included in the national, standardized 

prospective payment. 

(g) Split percentage payments. 

Normally, there are two payments 

(initial and final) paid for an HH PPS 

unit of payment. The initial payment is 

made in response to a request for 

anticipated payment (RAP) as described 

in paragraph (h) of this section, and the 

residual final payment is made in 

response to the submission of a final 

claim. Split percentage payments are 

made in accordance with requirements 

at § 409.43(c) of this chapter. 

(1) Split percentage payments for 

episodes beginning on or before 

December 31, 2019—(i) Initial and 

residual final payments for initial 

episodes on or before December 31, 

2019. (A) The initial payment for initial 

episodes is paid to an HHA at 60 

percent of the case-mix and wageadjusted 60-day episode rate. 

(B) The residual final payment for 

initial episodes is paid at 40 percent of 

the case-mix and wage-adjusted 60-day 

episode rate. 

(ii) Initial and residual final payments 

for subsequent episodes before 

December 31, 2019. (A) The initial 

payment for subsequent episodes is paid 

to an HHA at 50 percent of the case-mix 

and wage-adjusted 60-day episode rate. 

(B) The residual final payment for 

subsequent episodes is paid at 50 

percent of the case-mix and wageadjusted 60-day episode rate. 

(2) Split percentage payments for 

periods beginning on or after January 1, 

2020—(i) Initial and residual final 

payments for initial periods beginning 

on or after January 1, 2020. (A) The 

initial payment for initial 30-day 

periods is paid to an HHA at 60 percent 

of the case-mix and wage-adjusted 30- 

day payment rate. 

(B) The residual final payment for 

initial 30-day periods is paid at 40 

percent of the case-mix and wageadjusted 30-day payment rate. 

(ii) Initial and residual final payments 

for subsequent periods beginning on or 

after January 1, 2020. (A) The initial 

payment for subsequent 30-day periods 

is paid to an HHA at 50 percent of the 

case-mix and wage-adjusted 30-day 

payment rate. 

(B) The residual final payment for 

subsequent 30-day periods is paid at 50 

percent of the case-mix and wageadjusted 30-day payment rate. 

(iii) Split percentage payments on or 

after January 1, 2019. Split percentage 

payments are not made to HHAs that are 

certified for participation in Medicare 

effective on or after January 1, 2019. An 

HHA that is certified for participation in 

Medicare effective on or after January 1, 

2019 receives a single payment for a 30- 

day period of care after the final claim 

is submitted. 

(h) Requests for anticipated payment 

(RAP). (1) HHAs that are certified for 

participation in Medicare effective by 

December 31, 2018 submit requests for 

anticipated payment (RAPs) to request 

the initial split percentage payment as 

specified in paragraph (g) of this 

section. HHAs that are certified for 

participation in Medicare effective on or 

after January 1, 2019 are still required to 

submit RAPs although no split 

percentage payments are made in 

response to these RAP submissions. The 

HHA can submit a RAP when all of the 

following conditions are met: 

(i) After the OASIS assessment 

required at § 484.55(b)(1) and (d) is 

complete, locked or export ready, or 

there is an agency-wide internal policy 

establishing the OASIS data is finalized 

for transmission to the national 

assessment system. 

(ii) Once a physician’s verbal orders 

for home care have been received and 

documented as required at §§ 484.60(b) 

and 409.43(d) of this chapter. 

(iii) A plan of care has been 

established and sent to the physician as 

required at § 409.43(c) of this chapter. 

(iv) The first service visit under that 

plan has been delivered. 

(2) A RAP is based on the physician 

signature requirements in § 409.43(c) of 

this chapter and is not a Medicare claim 

for purposes of the Act (although it is a 

‘‘claim’’ for purposes of Federal, civil, 

criminal, and administrative law 

enforcement authorities, including but 

not limited to the following: 

(i) Civil Monetary Penalties Law (as 

defined in 42 U.S.C. 1320a–7a(i)(2)). 

(ii) The Civil False Claims Act (as 

defined in 31 U.S.C. 3729(c)). 

(iii) The Criminal False Claims Act 

(18 U.S.C. 287)). 

(iv) The RAP is canceled and 

recovered unless the claim is submitted 

within the greater of 60 days from the 

end date of the appropriate unit of 

payment, as defined in paragraph (b) of 

this section, or 60 days from the 

issuance of the RAP. 

(3) CMS has the authority to reduce, 

disprove, or cancel a RAP in situations 

when protecting Medicare program 

integrity warrants this action. 

§ 484.210 [Removed and Reserved] 

■ 9. Section 484.210 is removed and 

reserved. 

■ 10. Section 484.215 is amended— 

■ a. By revising the section heading; 

■ b. In paragraph (d) introductory text 

by removing the phrase ‘‘CMS calculates 

the’’ and adding in its place the phrase 

‘‘For episodes beginning on or before 

December 31, 2019, CMS calculates 

the’’; and 

■ c. By adding paragraph (f). 

The revisions and addition reads as 

follows: 


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§ 484.215 Initial establishment of the 

calculation of the national, standardized 

prospective payment rates. 

* * * * * 

(f) For periods beginning on or after 

January 1, 2020, a national, 

standardized prospective 30-day 

payment rate applies. The national, 

standardized prospective 30-day 

payment rate is an amount determined 

by the Secretary, as subsequently 

adjusted in accordance with § 484.225. 

■ 11. Section 484.220 is amended— 

■ a. By revising the section heading and 

introductory text; and 

■ b. In paragraph (a) introductory text 

by removing the phrase ‘‘national 

prospective 60-day episode’’ and adding 

in its place the phrase ‘‘national, 

standardized prospective’’. 

The revisions read as follows: 

§ 484.220 Calculation of the case-mix and 

wage area adjusted prospective payment 

rates. 

CMS adjusts the national, 

standardized prospective payment rates 

as referenced in § 484.215 to account for 

the following: 

* * * * * 

■ 12. Section 484.225 is amended— 

■ a. By revising the section heading and 

paragraph (a); 

■ b. In paragraphs (b) and (c) by 

removing the phrase ‘‘national 

prospective 60-day episode’’ and adding 

in its place the phrase ‘‘national, 

standardized prospective’’; and 

■ c. By adding paragraph (d). 

The revisions and addition reads as 

follows: 

§ 484.225 Annual update of the unadjusted 

national, standardized prospective payment 

rates. 

(a) CMS annually updates the 

unadjusted national, standardized 

prospective payment rate on a calendar 

year basis (in accordance with section 

1895(b)(1)(B) of the Act). 

* * * * * 

(d) For CY 2020, the national, 

standardized prospective 30-day 

payment amount is an amount 

determined by the Secretary. CMS 

annually updates this amount on a 

calendar year basis in accordance with 

paragraphs (a) through (c) of this 

section. 

■ 13. Section 484.230 is revised to read 

as follows: 

§ 484.230 Low-utilization payment 

adjustments. 

(a) For episodes beginning on or 

before December 31, 2019, an episode 

with four or fewer visits is paid the 

national per-visit amount by discipline 

determined in accordance with 

§ 484.215(a) and updated annually by 

the applicable market basket for each 

visit type, in accordance with § 484.225. 

(1) The national per-visit amount is 

adjusted by the appropriate wage index 

based on the site of service of the 

beneficiary. 

(2) An amount is added to the lowutilization payment adjustments for 

low-utilization episodes that occur as 

the beneficiary’s only episode or initial 

episode in a sequence of adjacent 

episodes. 

(3) For purposes of the home health 

PPS, a sequence of adjacent episodes for 

a beneficiary is a series of claims with 

no more than 60 days without home 

care between the end of one episode, 

which is the 60th day (except for 

episodes that have been PEP-adjusted), 

and the beginning of the next episode. 

(b) For periods beginning on or after 

January 1, 2020, an HHA receives a 

national 30-day payment of a 

predetermined rate for home health 

services, unless CMS determines at the 

end of the 30-day period that the HHA 

furnished minimal services to a patient 

during the 30-day period. 

(1) For each payment group used to 

case-mix adjust the 30-day payment 

rate, the 10th percentile value of total 

visits during a 30-day period of care is 

used to create payment group specific 

thresholds with a minimum threshold of 

at least 2 visits for each case-mix group. 

(2) A 30-day period with a total 

number of visits less than the threshold 

is paid the national per-visit amount by 

discipline determined in accordance 

with § 484.215(a) and updated annually 

by the applicable market basket for each 

visit type, in accordance with § 484.225. 

(3) The national per-visit amount is 

adjusted by the appropriate wage index 

based on the site of service for the 

beneficiary. 

(c) An amount is added to lowutilization payment adjustments for 

low-utilization periods that occur as the 

beneficiary’s only 30-day period or 

initial 30-day period in a sequence of 

adjacent periods of care. For purposes of 

the home health PPS, a sequence of 

adjacent periods of care for a beneficiary 

is a series of claims with no more than 

60 days without home care between the 

end of one period, which is the 30th day 

(except for episodes that have been 

partial payment adjusted), and the 

beginning of the next episode. 

■ 14. Section 484.235 is revised to read 

as follows: 

§ 484.235 Partial payment adjustments. 

(a) Partial episode payments (PEPs) 

for episodes beginning on or before 

December 31, 2019. (1) An HHA 

receives a national, standardized 60-day 

payment of a predetermined rate for 

home health services unless CMS 

determines an intervening event, 

defined as a beneficiary elected transfer 

or discharge with goals met or no 

expectation of return to home health 

and the beneficiary returned to home 

health during the 60-day episode, 

warrants a new 60-day episode for 

purposes of payment. A start of care 

OASIS assessment and physician 

certification of the new plan of care are 

required. 

(2) The PEP adjustment does not 

apply in situations of transfers among 

HHAs of common ownership. 

(i) Those situations are considered 

services provided under arrangement on 

behalf of the originating HHA by the 

receiving HHA with the common 

ownership interest for the balance of the 

60-day episode. 

(ii) The common ownership exception 

to the transfer PEP adjustment does not 

apply if the beneficiary moves to a 

different MSA or Non-MSA during the 

60-day episode before the transfer to the 

receiving HHA. 

(iii) The transferring HHA in 

situations of common ownership not 

only serves as a billing agent, but must 

also exercise professional responsibility 

over the arranged-for services in order 

for services provided under 

arrangements to be paid. 

(3) If the intervening event warrants a 

new 60-day payment and a new 

physician certification and a new plan 

of care, the initial HHA receives a 

partial episode payment adjustment 

reflecting the length of time the patient 

remained under its care based on the 

first billable visit date through and 

including the last billable visit date. The 

PEP is calculated by determining the 

actual days served as a proportion of 60 

multiplied by the initial 60-day 

payment amount. 

(b) Partial payment adjustments for 

periods beginning on or after January 1, 

2020. (1) An HHA receives a national, 

standardized 30-day payment of a 

predetermined rate for home health 

services unless CMS determines an 

intervening event, defined as a 

beneficiary elected transfer or discharge 

with goals met or no expectation of 

return to home health and the 

beneficiary returned to home health 

during the 30-day period, warrants a 

new 30-day period for purposes of 

payment. A start of care OASIS 

assessment and physician certification 

of the new plan of care are required. 

(2) The partial payment adjustment 

does not apply in situations of transfers 

among HHAs of common ownership. 

(i) Those situations are considered 

services provided under arrangement on 


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behalf of the originating HHA by the 

receiving HHA with the common 

ownership interest for the balance of the 

30-day period. 

(ii) The common ownership exception 

to the transfer partial payment 

adjustment does not apply if the 

beneficiary moves to a different MSA or 

Non-MSA during the 30-day period 

before the transfer to the receiving HHA. 

(iii) The transferring HHA in 

situations of common ownership not 

only serves as a billing agent, but must 

also exercise professional responsibility 

over the arranged-for services in order 

for services provided under 

arrangements to be paid. 

(3) If the intervening event warrants a 

new 30-day payment and a new 

physician certification and a new plan 

of care, the initial HHA receives a 

partial payment adjustment reflecting 

the length of time the patient remained 

under its care based on the first billable 

visit date through and including the last 

billable visit date. The partial payment 

is calculated by determining the actual 

days served as a proportion of 30 

multiplied by the initial 30-day 

payment amount. 

■ 15. Section 484.240 is revised to read 

as follows: 

§ 484.240 Outlier payments. 

(a) For episodes beginning on or 

before December 31, 2019, an HHA 

receives an outlier payment for an 

episode whose estimated costs exceeds 

a threshold amount for each case-mix 

group. The outlier threshold for each 

case-mix group is the episode payment 

amount for that group, or the PEP 

adjustment amount for the episode, plus 

a fixed dollar loss amount that is the 

same for all case-mix groups. 

(b) For periods beginning on or after 

January 1, 2020, an HHA receives an 

outlier payment for a 30-day period 

whose estimated cost exceeds a 

threshold amount for each case-mix 

group. The outlier threshold for each 

case-mix group is the 30-day payment 

amount for that group, or the partial 

payment adjustment amount for the 30- 

day period, plus a fixed dollar loss 

amount that is the same for all case-mix 

groups. 

(c) The outlier payment is a 

proportion of the amount of imputed 

cost beyond the threshold. 

(d) CMS imputes the cost for each 

claim by multiplying the national per-15 

minute unit amount of each discipline 

by the number of 15 minute units in the 

discipline and computing the total 

imputed cost for all disciplines. 

■ 16. Section 484.250 is amended by 

revising paragraph (a)(1) to read as 

follows: 

§ 484.250 Patient assessment data. 

(a) * * * 

(1) Such OASIS data described at 

§ 484.55(b) and (d) as is necessary for 

CMS to administer the payment rate 

methodologies described in §§ 484.215, 

484.220, 484.230, 484.235, and 484.240; 

and such OASIS data described at 

§ 484.55(b) and (d) as is necessary to 

meet the quality reporting requirements 

of section 1895(b)(3)(B)(v) of the Act. 

* * * * * 

■ 17. Section 484.320 is amended by 

revising paragraph (c) to read as follows: 

§ 484.320 Calculation of the Total 

Performance Score. 

* * * * * 

(c)(1) For performance years 1 through 

3, CMS will sum all points awarded for 

each applicable measure excluding the 

New Measures, weighted equally at the 

individual measure level to calculate a 

value worth 90 percent of the Total 

Performance Score. 

(2) For performance years 4 and 5, 

CMS will sum all points awarded for 

each applicable measure within each 

category of measures (OASIS-based, 

claims-based and HHCAHPs) excluding 

the New Measures, weighted at 35 

percent for the OASIS-based measure 

category, 35 percent for the claimsbased measure category, and 30 percent 

for the HHCAHPS measure category 

when all three measure categories are 

reported, to calculate a value worth 90 

percent of the Total Performance Score. 

* * * * * 

PART 486—CONDITIONS FOR 

COVERAGE OF SPECIALIZED 

SERVICES FURNISHED BY 

SUPPLIERS 

■ 18. The authority citation for part 486 

is revised to read as follows: 

Authority: 42 U.S.C. 1302, and 1395hh. 

■ 19. Add reserved subpart H and 

subpart I to read as follows: 

Subpart H—[Reserved] 

Subpart I—Requirements for Home Infusion 

Therapy Suppliers 

General Provisions 

Sec. 

486.500 Basis and Scope. 

486.505 Definitions. 

Standards for Home Infusion Therapy 

486.520 Plan of care. 

486.525 Required services. 

Subpart I—Requirements for Home 

Infusion Therapy Suppliers 

General Provisions 

§ 486.500 Basis and scope. 

Section 1861(s)(2)(iii) of the Act 

requires the Secretary to establish the 

conditions that home infusion therapy 

suppliers must meet in order to 

participate in the Medicare program and 

which are considered necessary to 

ensure the health and safety of patients. 

§ 486.505 Definitions. 

Applicable provider means a 

physician, a nurse provider, and a 

physician assistant. 

Home means a place of residence 

used as the home of an individual, 

including an institution that is used as 

a home. An institution that is used as a 

home may not be a hospital, CAH, or 

SNF as defined in section 1861(e)(1), 

1861(mm)(1), or 1819(a)(1) of the Act, 

respectively. 

Home infusion drug means a parental 

drug or biological administered 

intravenously, or subcutaneously for an 

administration period of 15 minutes or 

more, in the home of an individual 

through a pump that is an item of 

durable medical equipment. The term 

does not include insulin pump systems 

or a self-administered drug or biological 

on a self-administered drug exclusion 

list. 

Infusion drug administration calendar 

day means the day on which home 

infusion therapy services are furnished 

by skilled professionals in the 

individual’s home on the day of 

infusion drug administration. The 

skilled services provided on such day 

must be so inherently complex that they 

can only be safely and effectively 

performed by, or under the supervision 

of, professional or technical personnel. 

Qualified home infusion therapy 

supplier means a supplier of home 

infusion therapy that meets the all of the 

following criteria which are set forth at 

section 1861(iii)(3)(D)(i) of the Act: 

(1) Furnishes infusion therapy to 

individuals with acute or chronic 

conditions requiring administration of 

home infusion drugs. 

(2) Ensures the safe and effective 

provision and administration of home 

infusion therapy on a 7-day-a-week, 24- 

hour-a-day basis. 

(3) Is accredited by an organization 

designated by the Secretary in 

accordance with section 1834(u)(5) of 

the Act. 

(4) Meets such other requirements as 

the Secretary determines appropriate. 


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Standards for Home Infusion Therapy 

§ 486.520 Plan of care. 

The qualified home infusion therapy 

supplier ensures the following: 

(a) All patients must be under the care 

of an applicable provider. 

(b) All patients must have a plan of 

care established by a physician that 

prescribes the type, amount, and 

duration of the home infusion therapy 

services that are to be furnished. 

(c) The plan of care for each patient 

must be periodically reviewed by the 

physician. 

§ 486.525 Required services. 

The qualified home infusion therapy 

supplier must provide the following 

services on a 7-day-a-week, 24-hour-aday basis in accordance with the plan of 

care: 

(a) Professional services, including 

nursing services. 

(b) Patient training and education not 

otherwise paid for as durable medical 

equipment as described in 

§ 424.57(c)(12) of this chapter. 

(c) Remote monitoring and monitoring 

services for the provision of home 

infusion therapy services and home 

infusion drugs. 

PART 488—SURVEY, CERTIFICATION, 

AND ENFORCEMENT PROCEDURES 

■ 20. The authority citation for part 488 

is revised to read as follows: 

Authority: 42 U.S.C. 1302, and 1395hh. 

■ 21. Section 488.5 is amended— 

■ a. By redesignating paragraphs (a)(7) 

through (21) as paragraphs (a)(8) 

through (22); 

■ b. By adding a new paragraph (a)(7); 

■ c. In newly redesignated paragraph 

(a)(18)(i) by removing the word ‘‘and’’ at 

the end of the paragraph; 

■ d. In newly redesignated paragraph 

(a)(18)(ii) by removing the period and 

adding in its place ‘‘; and’’; and 

■ e. By adding paragraph (a)(18)(iii). 

The additions read as follows: 

§ 488.5 Application and re-application 

procedures for national accrediting 

organizations. 

(a) * * * 

(7) A statement acknowledging that 

all accrediting organization surveyors 

have completed or will complete the 

relevant program specific CMS online 

trainings established for state surveyors, 

initially, and thereafter. 

* * * * * 

(18) * * * 

(iii) Include a written statement that 

if a fully accredited and deemed facility 

in good standing provides written 

notification that they wish to 

voluntarily withdraw from the 

accrediting organization’s CMSapproved accreditation program, the 

accrediting organization must continue 

the facility’s current accreditation in full 

force and effect until the effective date 

of withdrawal identified by the facility 

or the expiration date of the term of 

accreditation, whichever comes first. 

* * * * * 

■ 22. Add reserved subpart K and 

subpart L to read as follows: 

Subpart K—[Reserved] 

Subpart L—Accreditation of Home Infusion 

Therapy Suppliers 

General Provisions 

Sec. 

488.1000 Basis and scope. 

488.1005 Definitions. 

Approval and Oversight of Home Infusion 

Therapy Supplier Accrediting Organizations 

488.1010 Application and reapplication 

procedures for national home infusion 

therapy accrediting organizations. 

488.1015 Resubmitting a request for 

reapproval. 

488.1020 Public notice and comment. 

488.1025 Release and use of home infusion 

therapy accreditation surveys. 

488.1030 Ongoing review of home infusion 

therapy accrediting organizations. 

488.1035 Ongoing responsibilities of a 

CMS-approved home infusion therapy 

accreditation organization. 

488.1040 Onsite observations of home 

infusion therapy accrediting organization 

operations. 

488.1045 Voluntary and involuntary 

termination. 

488.1050 Reconsideration. 

Subpart L—Accreditation of Home 

Infusion Therapy Suppliers 

General Provisions 

§ 488.1000 Basis and scope. 

(a) Regulatory basis for home infusion 

therapy services. The home infusion 

therapy health and safety regulations are 

codified at part 486, subpart L, of this 

chapter. 

(b) Statutory basis for the 

accreditation of home infusion therapy 

suppliers. (1) Sections 1102 and 1871 of 

the Act require that the Secretary 

prescribe such regulations as may be 

necessary to carry out the 

administration of the Medicare program. 

(2) Section 1834(u)(5) of the Act 

require the Secretary to designate and 

approve independent organizations for 

the purposes of accrediting qualified 

home infusion therapy suppliers. 

(c) Scope. This subpart sets forth the 

following: 

(1) Application and reapplication 

procedures for national accrediting 

organizations seeking approval or reapproval of authority to accredit 

qualified home infusion therapy 

suppliers. 

(2) Ongoing CMS oversight processes 

for approved accrediting organizations 

that accredit qualified home infusion 

therapy suppliers. 

(3) Appeal procedures for accrediting 

organizations that accredit qualified 

home infusion therapy suppliers. 

§ 488.1005 Definitions. 

As used in this subpart— 

Immediate jeopardy means a situation 

in which the provider’s or supplier’s 

non-compliance with one or more 

Medicare accreditation requirements 

has caused, or is likely to cause, serious 

injury, harm, impairment, or death to a 

patient. 

National accrediting organization 

means an organization that accredits 

provider or supplier entities under a 

specific program and whose accredited 

provider or supplier entities under each 

program are widely dispersed 

geographically across the United States. 

In addition, the specific program is 

active, fully implemented, and 

operational. 

National in scope means a program is 

fully implemented, operational, and 

widely dispersed geographically 

throughout the country. 

Qualified home infusion therapy 

supplier means a supplier of home 

infusion therapy that meets the all of the 

following criteria which are set forth at 

section 1861(iii)(3)(D)(i) of the Act: 

(1) Furnishes infusion therapy to 

individuals with acute or chronic 

conditions requiring administration of 

home infusion drugs. 

(2) Ensures the safe and effective 

provision and administration of home 

infusion therapy on a 7-day-a-week, 24- 

hour-a-day basis. 

(3) Is accredited by an organization 

designated by the Secretary in 

accordance with section 1834(u)(5) of 

the Act. 

(4) Meets such other requirements as 

the Secretary determines appropriate. 

Reasonable assurance means an 

accrediting organization has 

demonstrated to CMS’ satisfaction that 

its accreditation program requirements 

meet or exceed the Medicare program 

requirements. 

Rural area as defined at section 

1886(d)(2)(D) of the Act. 

Substantial allegation of noncompliance means a complaint from any 

of a variety of sources (such as patient, 

relative, or third party), including 

complaints submitted in person, by 

telephone, through written 

correspondence, or in the newspaper, 

magazine articles or other media, that 


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would, if found to be present, adversely 

affect the health and safety of patients 

and raises doubts as to a qualified home 

infusion therapy supplier’s compliance 

with the applicable Medicare 

accreditation requirements. 

Approval and Oversight of Home 

Infusion Therapy Supplier Accrediting 

Organizations 

§ 488.1010 Application and reapplication 

procedures for national accrediting 

organizations. 

(a) Information submitted with 

application. A national home infusion 

therapy accrediting organization 

applying to CMS for approval or reapproval of a designated home infusion 

therapy accreditation program must 

furnish CMS with information and 

materials that demonstrate that its home 

infusion therapy accreditation program 

requirements meet or exceed the 

applicable Medicare requirements for 

accrediting organizations, including the 

following: 

(1) Documentation that demonstrates 

the organization meets the definition of 

a national accrediting organization 

under § 488.1005 as it relates to the 

accreditation program. 

(2) The Medicare provider or supplier 

type for which the organization is 

requesting approval or re-approval. 

(3) Documentation that demonstrates 

the home infusion therapy accrediting 

organization’s ability to take into 

account the capacities of rural home 

infusion therapy suppliers (as required 

by section 1834(u)(5)(A)(ii) of the Act). 

(4) Information that demonstrates the 

home infusion therapy accrediting 

organization’s knowledge, expertise, 

and experience in home infusion 

therapy. 

(5) A detailed crosswalk (in table 

format) that identifies, for each of the 

applicable Medicare requirements, the 

exact language of the organization’s 

comparable accreditation requirements 

and standards. 

(6) A detailed description of the home 

infusion therapy accrediting 

organization’s survey processes to 

confirm that a home infusion therapy 

supplier’s processes are comparable to 

those of Medicare. This description 

must include all of the following: 

(i) The types and frequency of surveys 

performed, and a rationale for which 

accreditation requirements will be 

evaluated via onsite surveys and which 

will be evaluated via offsite audits, or 

other strategies for ensuring accredited 

home infusion therapy suppliers 

maintain adherence to the home 

infusion therapy accreditation program 

requirements, including an explanation 

of how the accrediting organization will 

maintain the schedule it proposes. 

(ii) Copies of the home infusion 

therapy accrediting organizations survey 

and audit forms, guidelines, and 

instructions to surveyors. 

(iii) Documentation demonstrating 

that the home infusion therapy 

accrediting organization’s onsite survey 

or offsite audit reports identify, for each 

finding of non-compliance with 

accreditation standards, the comparable 

Medicare home infusion therapy 

accreditation requirements, as 

applicable. 

(iv) A description of the home 

infusion therapy accrediting 

organization’s accreditation survey 

review process. 

(v) A description of the home infusion 

therapy accrediting organization’s 

procedures and timelines for notifying a 

surveyed or audited home infusion 

therapy supplier of non-compliance 

with the home infusion therapy 

accreditation program’s standards. 

(vi) A description of the home 

infusion therapy accrediting 

organization’s procedures and timelines 

for monitoring the home infusion 

therapy supplier’s correction of 

identified non-compliance with the 

accreditation program’s standards. 

(vii) The ability of the home infusion 

therapy accrediting organization to 

conduct timely reviews of accreditation 

applications. 

(viii) A statement acknowledging that, 

as a condition for CMS approval of a 

national accrediting organization’s 

accreditation program, the home 

infusion therapy accrediting 

organization agrees to provide CMS 

with information extracted from each 

home infusion therapy accreditation 

onsite survey, offsite audit or other 

evaluation strategies as part of its data 

submissions required under paragraph 

(a)(19) of this section, and, upon request 

from CMS, a copy of the most recent 

accreditation onsite survey, offsite 

audit, or other evaluation strategy 

together with any other information 

related to the survey as CMS may 

require (including corrective action 

plans). 

(ix) A statement acknowledging that 

the home infusion therapy accrediting 

organization will provide timely 

notification to CMS when an 

accreditation survey or complaint 

investigation identifies an immediate 

jeopardy as that term is defined at 

§ 488.1005. Using the format specified 

by CMS, the home infusion therapy 

accrediting organization must notify 

CMS within 2 business days from the 

date the accrediting organization 

identifies the immediate jeopardy. 

(7) Procedures to ensure that— 

(i) Unannounced onsite surveys, as 

appropriate, will be conducted 

periodically, including procedures that 

protect against unannounced surveys 

becoming known to the provider or 

supplier in advance of the visit; or 

(ii) Offsite survey audits are 

performed to evaluate the quality of 

services provided which may be 

followed up with periodic onsite visits. 

(8) The criteria for determining the 

size and composition of the home 

infusion therapy accrediting 

organization’s survey, audit and other 

evaluation strategy teams for individual 

supplier onsite surveys. The home 

infusion therapy accrediting 

organization’s criteria should include, 

but not be limited to the following 

information: 

(i) The expected number of individual 

home infusion therapy supplier 

locations to be surveyed using an onsite 

survey. 

(ii) The number of home infusion 

therapy suppliers to be surveyed using 

off-site audits. 

(iii) A description of other types of 

home infusion therapy accreditation 

review activities to be used. 

(iv) The reasons for each type of 

survey (that is, initial accreditation 

survey, reaccreditation survey, and 

complaint survey). 

(9) The overall adequacy of the 

number of the home infusion therapy 

accrediting organization’s surveyors, 

auditors, and other staff available to 

perform survey related activities, 

including how the organization will 

increase the size of the survey, audit, 

and other evaluation staff to match 

growth in the number of accredited 

facilities or programs while maintaining 

re-accreditation intervals for existing 

accredited facilities or programs. 

(10) Detailed information about the 

individuals who perform onsite surveys, 

offsite audits or other strategies for 

ensuring accredited home infusion 

therapy suppliers maintain adherence to 

the home infusion therapy accreditation 

program requirements, including all of 

the following information: 

(i) The number and types of 

professional and technical staff 

available for conducting onsite surveys, 

offsite audits, or other strategies for 

ensuring accredited home infusion 

therapy suppliers maintain adherence to 

the home infusion therapy accreditation 

program requirements. 

(ii) The education, employment, and 

experience requirements surveyors and 

auditors must meet. 

(iii) The content and length of the 

orientation program. 


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(11) The content, frequency and types 

of in-service training provided to survey 

and audit personnel. 

(12) The evaluation systems used to 

monitor the performance of individual 

surveyors, auditors and survey teams. 

(13) The home infusion therapy 

accrediting organization’s policies and 

procedures to avoid conflicts of interest, 

including the appearance of conflicts of 

interest, involving individuals who 

conduct surveys, audits or participate in 

accreditation decisions. 

(14) The policies and procedures used 

when a home infusion therapy supplier 

has a dispute regarding survey or audit 

findings, or an adverse decision. 

(15) Procedures for the home infusion 

therapy supplier to use to notify the 

home infusion therapy accrediting 

organization when the accredited home 

infusion therapy supplier does the 

either of the following: 

(i) Removes or ceases furnishing 

services for which they are accredited. 

(ii) Adds services for which they are 

not accredited. 

(16) The home infusion therapy 

accrediting organization’s procedures 

for responding to, and investigating 

complaints against accredited facilities, 

including policies and procedures 

regarding referrals, when applicable, to 

appropriate licensing bodies, 

ombudsmen offices, and CMS. 

(17) A description of the home 

infusion therapy accrediting 

organization’s accreditation status 

decision-making process. The home 

infusion therapy accrediting 

organization must furnish the following: 

(i) Its process for addressing 

deficiencies identified with 

accreditation program requirements, 

and the procedures used to monitor the 

correction of deficiencies identified 

during an accreditation survey and 

audit process. 

(ii) A description of all types and 

categories of accreditation decisions 

associated with the program, including 

the duration of each of the 

organization’s accreditation decisions. 

(iii) Its policies and procedures for the 

granting, withholding or removal of 

accreditation status for facilities that fail 

to meet the accrediting organization’s 

standards or requirements, assignment 

of less than full accreditation status or 

other actions taken by the organization 

in response to non-compliance with its 

standards and requirements. 

(iv) A statement acknowledging that 

the home infusion therapy accrediting 

organization agrees to notify CMS (in a 

manner CMS specifies) of any decision 

to revoke, terminate, or revise the 

accreditation status of a home infusion 

therapy supplier, within 3 business days 

from the date the organization takes an 

action. 

(18) A list of all currently accredited 

home infusion therapy suppliers, the 

type and category of accreditation, 

currently held by each, and the 

expiration date for each home infusion 

therapy supplier’s current accreditation. 

(19) A schedule of all survey activity 

(such as onsite surveys, offsite audits 

and other types if survey strategies) 

expected to be conducted by the 

organization during the 6-month period 

following submission of an initial or 

renewal application. 

(20) A written presentation that 

demonstrates the organization’s ability 

to furnish CMS with electronic data. 

(21) A description of the home 

infusion therapy accrediting 

organization’s data management and 

analysis system with respect to its 

surveys and accreditation decisions, 

including all of the following: 

(i) A detailed description of how the 

home infusion therapy accrediting 

organization uses its data to assure the 

compliance of its home infusion therapy 

accreditation program with the 

Medicare home infusion therapy 

accreditation program requirements. 

(ii) A written statement 

acknowledging that the home infusion 

therapy accrediting organization agrees 

to submit timely, accurate, and 

complete data that CMS has determined 

is both necessary to evaluate the 

accrediting organization’s performance 

and is not unduly burdensome for the 

accrediting organization to submit. 

(A) The organization must submit 

necessary data according to the 

instructions and timeframes CMS 

specifies. 

(B) Data to be submitted includes the 

following: 

(1) Accredited home infusion therapy 

supplier identifying information. 

(2) Survey findings. 

(3) Quality measures. 

(4) Notices of accreditation decisions. 

(22) The three most recent annual 

audited financial statements of the 

home infusion therapy accrediting 

organization that demonstrate that the 

organization’s staffing, funding, and 

other resources are adequate to perform 

the required surveys, audits, and related 

activities to maintain the accreditation 

program. 

(23) A written statement 

acknowledging that, as a condition for 

approval, the home infusion therapy 

accrediting organization agrees to the 

following: 

(i) Voluntary termination. Provide 

written notification to CMS and all 

home infusion therapy suppliers 

accredited under its CMS-approved 

home infusion therapy accreditation 

program at least 90 calendar days in 

advance of the effective date of a 

decision by the home infusion therapy 

accrediting organization to voluntarily 

terminate its CMS-approved home 

infusion therapy accreditation program 

and the implications for the suppliers’ 

payment status once their current term 

of accreditation expires in accordance 

with the requirements at § 488.1045(a). 

(ii) Involuntary termination. Provide 

written notification to all accredited 

home infusion therapy suppliers 

accredited under its CMS-approved 

home infusion therapy accreditation 

program no later than 30 calendar days 

after the notice is published in the 

Federal Register announcing that CMS 

is withdrawing its approval of its 

accreditation program and the 

implications for the home infusion 

therapy supplier’s payment status in 

accordance with the requirements at 

§ 488.1045(b) once their current term of 

accreditation expires. 

(A) For both voluntary and 

involuntary terminations, provide a 

second written notification to all 

accredited home infusion therapy 

suppliers 10 calendar days prior to the 

organization’s accreditation program 

effective date of termination. 

(B) Notify CMS, in writing 

(electronically or hard copy), within 2 

business days of a deficiency identified 

in any accredited home infusion therapy 

supplier from any source where the 

deficiency poses an immediate jeopardy 

to the home infusion therapy supplier’s 

beneficiaries or a hazard to the general 

public. 

(iii) Provide, on an annual basis, 

summary accreditation activity data and 

trends including the following: 

(A) Deficiencies. 

(B) Complaints. 

(C) Terminations. 

(D) Withdrawals. 

(E) Denials. 

(F) Accreditation decisions. 

(G) Other survey-related activities as 

specified by CMS. 

(iv) If CMS terminates a home 

infusion therapy accrediting 

organization’s approved status, the 

home infusion therapy accrediting 

organization must work collaboratively 

with CMS to direct its accredited home 

infusion therapy suppliers to the 

remaining CMS-approved accrediting 

organizations within a reasonable 

period of time. 

(v) Notify CMS at least 60 days in 

advance of the implementation date of 

any significant proposed changes in its 

CMS-approved home infusion therapy 

accreditation program and that it agrees 

not to implement the proposed changes 


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without prior written notice of 

continued program approval from CMS, 

except as provided for at 

§ 488.1040(b)(2). 

(vi) A statement acknowledging that, 

in response to a written notice from 

CMS to the home infusion therapy 

accrediting organization of a change in 

the applicable home infusion therapy 

accreditation requirements or survey 

process, the organization will provide 

CMS with proposed corresponding 

changes in the accrediting 

organization’s home infusion therapy 

accreditation requirements for its CMSapproved home infusion therapy 

accreditation program to ensure that its 

accreditation standards continue to 

meet or exceed those of Medicare, or 

survey process remains comparable 

with that of Medicare. The home 

infusion therapy accrediting 

organization must comply with the 

following requirements: 

(A) The proposed changes must be 

submitted within 30 calendar days of 

the date of the written CMS notice to the 

home infusion therapy accrediting 

organization or by a date specified in 

the notice, whichever is later. CMS 

gives due consideration to a home 

infusion therapy accrediting 

organization’s request for an extension 

of the deadline as long as it is submitted 

prior to the due date. 

(B) The proposed changes are not to 

be implemented without prior written 

notice of continued program approval 

from CMS, except as provided for at 

§ 488.1040(b)(2)(ii). 

(24) The organization’s proposed fees 

for accreditation, including any plans 

for reducing the burden and cost of 

accreditation to small and rural 

suppliers. 

(b) Additional information needed. If 

CMS determines that additional 

information is necessary to make a 

determination for approval or denial of 

the home infusion therapy accrediting 

organization’s initial application or reapplication for CMS-approval of an 

accreditation program, CMS requires 

that the home infusion therapy 

accrediting organization submit any 

specific documentation requirements 

and attestations as a condition of 

approval of accreditation status. CMS 

notifies the home infusion therapy 

accrediting organization and afford it an 

opportunity to provide the additional 

information. 

(c) Withdrawing an application. A 

home infusion therapy accrediting 

organization may withdraw its initial 

application for CMS’ approval of its 

home infusion therapy accreditation 

program at any time before CMS 

publishes the final notice described in 

§ 488.1025(b). 

(d) Notice of approval or disapproval 

of application. CMS sends a notice of its 

decision to approve or disapprove the 

home infusion therapy accrediting 

organization’s application within 210 

calendar days from the date CMS 

determines the home infusion therapy 

accrediting organization’s application is 

complete. The final notice specifies the 

following: 

(1) The basis for the decision. 

(2) The effective date. 

(3) The term of the approval (not 

exceed 6 years). 

§ 488.1015 Resubmitting a request for 

reapproval. 

(a) Except as provided in paragraph 

(b) of this section, a home infusion 

therapy accrediting organization whose 

request for CMS’s approval or reapproval of an accreditation program 

has been denied, or a home infusion 

therapy accrediting organization that 

has voluntarily withdrawn an initial 

application, may resubmit its 

application if the home infusion therapy 

accrediting organization satisfies all of 

the following requirements: 

(1) Revises its home infusion therapy 

accreditation program to address the 

issues related to the denial of its 

previous request or its voluntary 

withdrawal. 

(2) Resubmits the application in its 

entirety. 

(b) If a home infusion therapy 

accrediting organization has requested, 

in accordance with § 488.1050, a 

reconsideration of CMS’s disapproval, it 

may not submit a new application for 

approval of a home infusion therapy 

accreditation program until such 

reconsideration is administratively 

final. 

§ 488.1020 Public notice and comment. 

CMS publishes a notice in the Federal 

Register when the following conditions 

are met: 

(a) Proposed notice. CMS publishes a 

notice after the receipt of a completed 

application from a national home 

infusion therapy accrediting 

organization seeking CMS’s approval of 

a home infusion therapy accreditation 

program. The notice identifies the home 

infusion therapy accrediting 

organization, the type of suppliers 

covered by the home infusion therapy 

accreditation program, and provides at 

least a 30 day public comment period 

(beginning on the date of publication). 

(b) Final notice. The final notice 

announces CMS decision to approve or 

deny a national accrediting organization 

application. The notice specifies the 

basis for the CMS decision. 

(1) Approval or re-approval. If CMS 

approves or re-approves the home 

infusion therapy accrediting 

organization’s home infusion therapy 

accreditation program, the final notice 

at a minimum includes the following 

information: 

(i) A description of how the home 

infusion therapy accreditation program 

meets or exceeds Medicare home 

infusion therapy accreditation program 

requirements. 

(ii) The effective date of approval (no 

later than the publication date of the 

notice). 

(iii) The term of the approval (6 years 

or less). 

(2) Denial. If CMS does not approve 

the home infusion therapy accrediting 

organization’s accreditation program, 

the final notice describes the following: 

(i) How the home infusion therapy 

accrediting organization fails to meet 

Medicare home infusion therapy 

accreditation program requirements. 

(ii) The effective date of the decision. 

§ 488.1025 Release and use of home 

infusion therapy accreditation surveys. 

The home infusion therapy 

accrediting organization must include, 

in its accreditation agreement with each 

supplier, an acknowledgement that the 

supplier agrees to release to CMS a copy 

of its most current accreditation survey 

and any information related to the 

survey that CMS may require, corrective 

action plans. 

(a) CMS may determine that a home 

infusion therapy supplier does not meet 

the applicable Medicare conditions or 

requirements on the basis of its own 

investigation of the accreditation survey 

or any other information related to the 

survey. 

(b) With the exception of home health 

agency surveys, general disclosure of an 

accrediting organization’s survey 

information is prohibited under section 

1865(b) of the Act. CMS may publically 

disclose an accreditation survey and 

information related to the survey, upon 

written request, to the extent that the 

accreditation survey and survey 

information are related to an 

enforcement action taken by CMS. 

§ 488.1030 Ongoing review of home 

infusion therapy accrediting organizations. 

(a) Performance review. CMS 

evaluates the performance of each CMSapproved home infusion therapy 

accreditation program on an ongoing 

basis. This review includes the review 

of the following: 

(1) The home infusion therapy 

accrediting organization’s survey 

activity. 

(2) The home infusion therapy 

accrediting organization’s continued 


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fulfillment of the requirements at 

§§ 488.1010 and 488.1035. 

(b) Comparability review. CMS 

assesses the equivalency of a home 

infusion therapy accrediting 

organization’s CMS-approved program 

requirements with the comparable 

Medicare home infusion therapy 

accreditation requirements after CMS 

imposes new or revised Medicare 

accreditation requirements. When this 

occurs, the following takes place: 

(1) CMS provides the home infusion 

therapy accrediting organizations with 

written notice of the changes to the to 

the Medicare home infusion therapy 

accreditation requirements. 

(2) The home infusion therapy 

accrediting organization must make 

revisions to its home infusion therapy 

accreditation standards or survey 

processes which incorporate the new or 

revised Medicare accreditation 

requirements. 

(3) In the written notice, CMS 

specifies the deadline (no less than 30 

calendar days) by which the home 

infusion therapy accrediting 

organization must submit its proposed 

revised home infusion therapy 

accreditation standard or survey process 

revisions, and the timeframe(s) for 

implementation of these revised home 

infusion therapy accreditation 

standards. 

(4) CMS may extend the submission 

deadline by which the accrediting 

organization must submit its proposed 

revised home infusion therapy 

accreditation standards and survey 

processes, if both of the following occur: 

(i) The accrediting organization 

submits a written request for an 

extension of the submission deadline. 

(ii) The request for extension is 

submitted prior to the original 

submission deadline. 

(5) After completing the comparability 

review of the home infusion therapy 

accrediting organizations revised home 

infusion therapy accreditation standards 

and survey processes, CMS shall 

provide written notification to the home 

infusion therapy accrediting 

organization regarding whether or not 

its home infusion therapy accreditation 

program, including the proposed 

revised home infusion therapy 

accreditation standards and 

implementation timeframe(s), continues 

to meet or exceed all applicable 

Medicare requirements. 

(6) If, no later than 60 calendar days 

after receipt of the home infusion 

therapy accrediting organization’s 

proposed changes, CMS does not 

provide the written notice to the home 

infusion therapy accrediting 

organization required, then the revised 

home infusion therapy accreditation 

standards and program is deemed to 

meet or exceed all applicable Medicare 

requirements and to have continued 

CMS-approval. 

(7) If a home infusion therapy 

accrediting organization is required to 

submit a new application because CMS 

imposes new home infusion therapy 

regulations or makes significant 

substantive revisions to the existing 

home infusion therapy regulations, CMS 

provides notice of the decision to 

approve or disapprove the new 

application submitted by the home 

infusion therapy accrediting 

organization within the time period 

specified in § 488.1010(d). 

(8) If a home infusion therapy 

accrediting organization fails to submit 

its proposed changes to its home 

infusion therapy accreditation standards 

and survey processes within the 

required timeframe, or fails to 

implement the proposed changes that 

have been determined or deemed by 

CMS to be comparable, CMS may open 

an accreditation program review in 

accordance with paragraph (d) of this 

section. 

(c) Review of revised home infusion 

therapy accreditation standards 

submitted to CMS by an accrediting 

organization. When a home infusion 

therapy accrediting organization 

proposes to adopt new or revised 

accreditation standards, requirements or 

changes in its survey process, the home 

infusion therapy accrediting 

organization must do the following: 

(1) Provide CMS with written notice 

of any proposed changes in home 

infusion therapy accreditation 

standards, requirements or survey 

process at least 60 days prior to the 

proposed implementation date of the 

proposed changes. 

(2) Not implement any of the 

proposed changes before receiving 

CMS’s approval, except as provided in 

paragraph (c)(4) of this section. 

(3) Provide written notice to CMS that 

includes all of the following: 

(i) A detailed description of the 

changes that are to be made to the 

organization’s home infusion therapy 

accreditation standards, requirements 

and survey processes. 

(ii) A detailed crosswalk (in table 

format) that states the exact language of 

the organization’s revised accreditation 

requirements and the applicable 

Medicare requirements for each. 

(4) CMS must provide a written notice 

to the home infusion therapy 

accrediting organization which states 

whether the home infusion therapy 

accreditation program, including the 

proposed revisions, continues or does 

not continue to meet or exceed all 

applicable Medicare home infusion 

therapy requirements within 60 days of 

receipt of the home infusion therapy 

accrediting organization’s proposed 

changes. If CMS has made a finding that 

the home infusion therapy accrediting 

organization’s home infusion therapy 

accreditation program, accreditation 

requirements and survey processes, 

including the proposed revisions does 

not continue to meet or exceed all 

applicable Medicare home infusion 

therapy requirements. CMS must state 

the reasons for these findings. 

(5) If, no later than 60 calendar days 

after receipt of the home infusion 

therapy accrediting organization’s 

proposed changes, CMS does not 

provide written notice to the home 

infusion therapy accrediting 

organization that the home infusion 

therapy accreditation program, 

including the proposed revisions, 

continues or does not continue to meet 

or exceed all applicable Medicare home 

infusion therapy requirements, then the 

revised home infusion therapy 

accreditation program is deemed to 

meet or exceed all applicable Medicare 

home infusion therapy requirements 

and to have continued CMS approval. 

(6) If a home infusion therapy 

accrediting organization implements 

changes that have neither been 

determined nor deemed by CMS to be 

comparable to the applicable Medicare 

home infusion therapy requirements, 

CMS may open a home infusion therapy 

accreditation program review in 

accordance with paragraph (d) of this 

section. 

(d) CMS-approved home infusion 

therapy accreditation program review. If 

a comparability, performance, or 

standards review reveals evidence of 

substantial non-compliance of a home 

infusion therapy accrediting 

organization’s CMS-approved home 

infusion therapy accreditation program 

with the requirements of this subpart, 

CMS may initiate a home infusion 

therapy accreditation program review. 

(1) If a home infusion therapy 

accreditation program review is 

initiated, CMS will provide written 

notice to the home infusion therapy 

accrediting organization indicating that 

its CMS-approved accreditation program 

approval may be in jeopardy and that a 

home infusion therapy accreditation 

program review is being initiated. The 

notice will provide all of the following 

information: 

(i) A statement of the instances, rates 

or patterns of non-compliance 

identified, as well as other related 

information, if applicable. 


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(ii) A description of the process to be 

followed during the review, including a 

description of the opportunities for the 

home infusion therapy accrediting 

organization to offer factual information 

related to CMS’ findings. 

(iii) A description of the possible 

actions that may be imposed by CMS 

based on the findings of the home 

infusion therapy accreditation program 

review. 

(iv) The actions the home infusion 

therapy accrediting organization must 

take to address the identified 

deficiencies 

(v) The length of the accreditation 

program review probation period, which 

will include monitoring of the home 

infusion therapy accrediting 

organization’s performance and 

implementation of the corrective action 

plan. The probation period is not to 

exceed 180 calendar days from the date 

that CMS approves the AOs corrective 

action plan. 

(2) CMS will review and approve the 

home infusion therapy accrediting 

organization’s plan of correction for 

acceptability within 30 days after 

receipt. 

(3) CMS will monitor the AO’s 

performance and implementation of the 

plan of correction during the probation 

period which is not to exceed 180 days 

from the date of approval of the plan of 

correction. 

(4) If CMS determines, as a result of 

the home infusion therapy accreditation 

program review or a review of an 

application for renewal of the 

accrediting organizations existing CMSapproved home infusion therapy 

accreditation program, that the home 

infusion therapy accrediting 

organization has failed to meet any of 

the requirements of this subpart, CMS 

may place the home infusion therapy 

accrediting organization’s CMSapproved home infusion therapy 

accreditation program on an additional 

probation period of up to 180 calendar 

days subsequent to the 180-day 

probation period described in paragraph 

(d)(1)(v) of this section to implement 

additional corrective actions or 

demonstrate sustained compliance, not 

to exceed the home infusion therapy 

accrediting organization’s current term 

of approval. In the case of a renewal 

application where CMS has already 

placed the home infusion therapy 

accreditation program on probation, 

CMS indicates that any approval of the 

application is conditional while the 

program is placed on probation. 

(i) Within 60 calendar days after the 

end of any probationary period, CMS 

issues a written determination to the 

home infusion therapy accrediting 

organization as to whether or not its 

CMS-approved home infusion therapy 

accreditation program continues to meet 

the requirements of this subpart, 

including the reasons for the 

determination. 

(ii) If CMS determines that the home 

infusion therapy accrediting 

organization does not meet the 

requirements, CMS may withdraw 

approval of the CMS-approved home 

infusion therapy accreditation program. 

The notice of determination provided to 

the home infusion therapy accrediting 

organization includes notice of the 

removal of approval, reason for the 

removal, including the effective date 

determined in accordance with 

paragraph (d)(4)(iii) of this section. 

(iii) CMS publishes in the Federal 

Register a notice of its decision to 

withdraw approval of a CMS-approved 

accreditation program, including the 

reasons for the withdrawal, effective 60 

calendar days after the date of 

publication of the notice. 

(e) Immediate jeopardy. If at any time 

CMS determines that the continued 

approval of a CMS-approved home 

infusion therapy accreditation program 

of any home infusion therapy 

accrediting organization poses an 

immediate jeopardy to the patients of 

the suppliers accredited under the 

program, or the continued approval 

otherwise constitutes a significant 

hazard to the public health, CMS may 

immediately withdraw the approval of a 

CMS-approved home infusion therapy 

accreditation program of that home 

infusion therapy accrediting 

organization and publish a notice of the 

removal, including the reasons for it, in 

the Federal Register. 

(f) Notification to home infusion 

therapy suppliers of withdrawal of CMS 

approval status. A home infusion 

therapy accrediting organization whose 

CMS approval of its home infusion 

therapy accreditation program has been 

withdrawn must notify each of its 

accredited home infusion therapy 

suppliers, in writing, of the withdrawal 

of CMS approval status no later than 30 

calendar days after the notice is 

published in the Federal Register. The 

notification to the accredited home 

infusion therapy suppliers must inform 

them of the implications for their 

payment status once their current term 

of accreditation expires. 

§ 488.1035 Ongoing responsibilities of a 

CMS-approved home infusion therapy 

accrediting organization. 

A home infusion therapy 

accreditation organization approved by 

CMS must carry out the following 

activities on an ongoing basis: 

(a) Provide CMS with all of the 

following in written format (either 

electronic or hard copy): 

(1) Copies of all home infusion 

therapy accreditation surveys, together 

with any survey-related information that 

CMS may require (including corrective 

action plans and summaries of findings 

with respect to unmet CMS 

requirements). 

(2) Notice of all accreditation 

decisions. 

(3) Notice of all complaints related to 

providers or suppliers. 

(4) Information about all home 

infusion therapy accredited suppliers 

against which the home infusion 

therapy accreditation organization has 

taken remedial or adverse action, 

including revocation, withdrawal, or 

revision of the providers or suppliers 

accreditation. 

(5) The home infusion therapy 

accrediting organization must provide, 

on an annual basis, summary data 

specified by CMS that relate to the past 

year’s accreditation activities and 

trends. 

(6) Notice of any proposed changes in 

the home infusion therapy accrediting 

organization’s accreditation standards or 

requirements or survey process. If the 

home infusion therapy accrediting 

organization implements the changes 

before or without CMS’ approval, CMS 

may withdraw its approval of the 

accrediting organization. 

(b) Within 30 calendar days after a 

change in CMS requirements, the home 

infusion therapy accrediting 

organization must submit an 

acknowledgment of receipt of CMS’ 

notification to CMS. 

(c) The home infusion therapy 

accrediting organization must permit its 

surveyors to serve as witnesses if CMS 

takes an adverse action based on 

accreditation findings. 

(d) Within 2 business days of 

identifying a deficiency of an accredited 

home infusion therapy supplier that 

poses immediate jeopardy to a 

beneficiary or to the general public, the 

home infusion therapy accrediting 

organization must provide CMS with 

written notice of the deficiency and any 

adverse action implemented by the 

accrediting organization. 

(e) Within 10 calendar days after 

CMS’ notice to a CMS-approved home 

infusion therapy accrediting 

organization that CMS intends to 

withdraw approval of the home infusion 

therapy accrediting organization, the 

home infusion therapy accrediting 

organization must provide written 

notice of the withdrawal to all of the 

home infusion therapy accrediting 

organization’s accredited suppliers. 


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§ 488.1040 Onsite observations of home 

infusion therapy accrediting organization 

operations. 

(a) As part of the application review 

process, the ongoing review process, or 

the continuing oversight of a home 

infusion therapy accrediting 

organization’s performance, CMS may 

conduct onsite inspections of the home 

infusion therapy accrediting 

organization’s operations and offices at 

any time to verify the home infusion 

therapy accrediting organization’s 

representations and to assess the home 

infusion therapy accrediting 

organization’s compliance with its own 

policies and procedures. 

(b) Activities to be performed by CMS 

staff during the onsite inspections may 

include, but are not limited to the 

following: 

(1) Interviews with various 

accrediting organization staff. 

(2) Review of documents, survey files, 

audit tools, and related records. 

(3) Observation of meetings 

concerning the home infusion therapy 

accreditation process. 

(4) Auditing meetings concerning the 

accreditation process. 

(5) Observation of in-progress surveys 

and audits. 

(6) Evaluation of the accrediting 

organization’s survey results and 

accreditation decision-making process. 

§ 488.1045 Voluntary and involuntary 

termination. 

(a) Voluntary termination by a CMSapproved accrediting program. In 

accordance with § 488.1010(a)(23), a 

home infusion therapy accrediting 

organization that decides to voluntarily 

terminate its CMS-approved home 

infusion therapy accreditation program 

must provide written notice at least 90 

days in advance of the effective date of 

the termination to CMS and each of its 

accredited home infusion therapy 

suppliers. 

(b) Involuntary termination of an 

accrediting organization’s approval by 

CMS. Once CMS publishes the notice in 

the Federal Register announcing its 

decision terminate the home infusion 

therapy accrediting organization’s home 

infusion therapy accreditation program, 

the home infusion therapy accrediting 

organization must provide written 

notification to all suppliers accredited 

under its CMS-approved home infusion 

therapy accreditation program no later 

than 30 calendar days after the notice is 

published in the Federal Register 

announcing that CMS is withdrawing its 

approval of its home infusion therapy 

accreditation program and the 

implications for the home infusion 

therapy suppliers payment status in 

accordance with the requirements at 

§ 488.1010(f) once their current term of 

accreditation expires. 

(c) Voluntary and involuntary 

terminations. For both voluntary and 

involuntary terminations— 

(1) The accreditation status of affected 

home infusion therapy suppliers is 

considered to remain in effect until their 

current term of accreditation expires; 

(2) If the home infusion therapy 

supplier wishes to avoid a suspension of 

payment, it must provide written notice 

to CMS at least 60-calendar days prior 

to its accreditation expiration date that 

it has submitted an application for home 

infusion therapy accreditation under 

another CMS-approved home infusion 

therapy accreditation program. Failure 

to comply with this 60-calendar day 

requirement prior to expiration of their 

current home infusion therapy 

accreditation stations within could 

result in a suspension of payment; and 

(3) The home infusion therapy 

accrediting organization provides a 

second written notification to all 

accredited home infusion therapy 

suppliers ten calendar days prior to the 

organization’s accreditation program 

effective date of termination. 

(d) Voluntary withdrawal from 

accreditation requested by a home 

infusion therapy supplier. If a voluntary 

withdrawal from accreditation is 

requested by the home infusion therapy 

supplier, the withdrawal may not 

become effective until the accrediting 

organization completes all of the 

following steps: 

(1) The accrediting organization must 

contact the home infusion therapy 

supplier to seek written confirmation 

that the home infusion therapy supplier 

intends to voluntarily withdraw from 

the home infusion therapy accreditation 

program. 

(2) The home infusion therapy 

accrediting organization must advise the 

home infusion therapy supplier, in 

writing, of the statutory requirement for 

accreditation for all home infusion 

therapy suppliers and the possible 

payment consequences for a lapse in 

accreditation status. 

(3) The home infusion therapy 

accrediting organization must submit 

their final notice of the voluntary 

withdrawal of accreditation by the home 

infusion therapy supplier to CMS by 5 

business days after the request for 

voluntary withdrawal is ultimately 

processed and effective. 

§ 488.1050 Reconsideration. 

(a) General rule. A home infusion 

therapy accrediting organization 

dissatisfied with a determination that its 

home infusion therapy accreditation 

requirements do not provide or do not 

continue to provide reasonable 

assurance that the suppliers accredited 

by the home infusion therapy 

accrediting organization meet the 

applicable quality standards is entitled 

to reconsideration. 

(b) Filing requirements. (1) A written 

request for reconsideration must be filed 

within 30 calendar days of the receipt 

of CMS notice of an adverse 

determination or non-renewal. 

(2) The written request for 

reconsideration must specify the 

findings or issues with which the home 

infusion therapy accrediting 

organization disagrees and the reasons 

for the disagreement. 

(3) A requestor may withdraw its 

written request for reconsideration at 

any time before the issuance of a 

reconsideration determination. 

(c) CMS response to a request for 

reconsideration. In response to a request 

for reconsideration, CMS provides the 

accrediting organization with— 

(1) The opportunity for a hearing to be 

conducted by a hearing officer 

appointed by the Administrator of CMS 

and provide the accrediting organization 

the opportunity to present, in writing 

and in person, evidence or 

documentation to refute the 

determination to deny approval, or to 

withdraw or not renew designation; and 

(2) Written notice of the time and 

place of the hearing at least 10 business 

days before the scheduled date. 

(d) Hearing requirements and rules. 

(1) The reconsideration hearing is a 

public hearing open to all of the 

following: 

(i) Authorized representatives and 

staff from CMS, including, but not 

limited to, the following: 

(A) Technical advisors (individuals 

with knowledge of the facts of the case 

or presenting interpretation of the facts). 

(B) Legal counsel. 

(C) Non-technical witnesses with 

personal knowledge of the facts of the 

case. 

(ii) Representatives from the 

accrediting organization requesting the 

reconsideration including, but not 

limited to, the following: 

(A) Authorized representatives and 

staff from the accrediting organization. 

(B) Technical advisors (individuals 

with knowledge of the facts of the case 

or presenting interpretation of the facts). 

(C) Legal counsel. 

(D) Non-technical witnesses, such as 

patients and family members that have 

personal knowledge of the facts of the 

case. 

(2) The hearing is conducted by the 

hearing officer who receives testimony 

and documents related to the proposed 

action. 


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32522 Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules 

(3) Testimony and other evidence may 

be accepted by the hearing officer even 

though such evidence may be 

inadmissible under the Federal Rules of 

Civil Procedure. 

(4) The hearing officer does not have 

the authority to compel by subpoena the 

production of witnesses, papers, or 

other evidence. 

(5) Within 45 calendar days after the 

close of the hearing, the hearing officer 

will present the findings and 

recommendations to the accrediting 

organization that requested the 

reconsideration. 

(6) The written report of the hearing 

officer will include separate numbered 

findings of fact and the legal 

conclusions of the hearing officer. 

(7) The hearing officer’s decision is 

final. 

Dated: June 25, 2018. 

Seema Verma, 

Administrator, Centers for Medicare and 

Medicaid Services. 

Dated: June 28, 2018. 

Alex M. Azar II, 

Secretary, Department of Health and Human 

Services. 

[FR Doc. 2018–14443 Filed 7–2–18; 4:15 pm] 

BILLING CODE 4120–01–P 


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