37600 Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

42 CFR Part 484 

[CMS–1766–P] 

RIN 0938–AU77 

Medicare Program; Calendar Year (CY) 

2023 Home Health Prospective 

Payment System Rate Update; Home 

Health Quality Reporting Program 

Requirements; Home Health ValueBased Purchasing Expanded Model 

Requirements; and Home Infusion 

Therapy Services Requirements 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), Department 

of Health and Human Services (HHS). 

ACTION: Proposed rule. 

SUMMARY: This proposed rule would set 

forth routine updates to the Medicare 

home health and home infusion therapy 

services payment rates for calendar year 

(CY) 2023 in accordance with existing 

statutory and regulatory requirements. 

This proposed rule discusses home 

health utilization; proposes a 

methodology for determining the 

difference between assumed versus 

actual behavior change on estimated 

aggregate expenditures for home health 

payments as result of the change in the 

unit of payment to 30 days and the 

implementation of the Patient Driven 

Groupings Model (PDGM) case-mix 

adjustment methodology; and proposes 

a temporary retrospective and 

permanent prospective adjustment to 

the CY 2023 home health payment rates. 

This rule proposes reassignment of 

certain diagnosis codes under the 

PDGM. and proposes to establish a 

permanent mitigation policy to smooth 

the impact of year-to-year changes in 

home health payments related to 

changes in the home health wage index. 

This rule also proposes recalibration of 

the PDGM case-mix weights and 

updates the low utilization payment 

adjustment (LUPA) thresholds, 

functional impairment levels, 

comorbidity adjustment subgroups for 

CY 2023 and the fixed-dollar loss ratio 

(FDL) used for outlier payments. 

Additionally, this rule discusses the 

future collection of data regarding the 

use of telecommunications technology 

during a 30-day home health period of 

care on home health claims. In addition, 

this rule proposes changes to the Home 

Health Quality Reporting Program (HH 

QRP) requirements; changes to the 

expanded Home Health Value-Based 

Purchasing (HHVBP) Model; and 

updates to the home infusion therapy 

services payment rates for CY 2023. 

DATES: To be assured consideration, 

comments must be received at one of 

the addresses provided below, no later 

than 5 p.m. on August 16, 2022. 

ADDRESSES: In commenting, please refer 

to file code CMS–1766–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 https://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–1766–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–1766–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: 

Brian Slater, (410) 786–5229, for home 

health and home infusion therapy 

payment inquiries. 

For general information about home 

infusion payment, send your inquiry via 

email to HomeInfusionPolicy@

cms.hhs.gov. 

For general information about the 

Home Health Prospective Payment 

System (HH PPS), send your inquiry via 

email to HomeHealthPolicy@

cms.hhs.gov. 

For information about the Home 

Health Quality Reporting Program (HH 

QRP), send your inquiry via email to 

HHQRPquestions@cms.hhs.gov. 

For more information about the 

expanded Home Health Value-Based 

Purchasing Model, please visit the 

Expanded HHVBP Model web page at 

https://innovation.cms.gov/innovationmodels/expanded-home-health-valuebased-purchasing-model. 

SUPPLEMENTARY INFORMATION: 

I. Executive Summary and Advancing 

Health Information Exchange 

A. Executive Summary 

1. Purpose and Legal Authority 

a. Home Health Prospective Payment 

System (HH PPS) 

As required under section 1895(b) of 

the Social Security Act (the Act), this 

proposed rule would update the 

payment rates for HHAs for CY 2023. In 

addition, the rule would: recalibrate the 

case-mix weights under section 

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

for 30-day periods of care in CY 2023; 

determine the impact of differences 

between assumed behavior changes and 

actual behavior changes on estimated 

aggregate expenditures for CYs 2020– 

2021 in accordance with section 

1895(b)(3)(D)(i) of the Act; propose a 

permanent payment adjustment to the 

CY 2023 30-day payment rate and solicit 

comments on a temporary payment 

adjustment to the 30-day payment rate 

in accordance with section 

1895(b)(3)(D)(ii) and (iii) of the Act; 

update the LUPA thresholds, functional 

impairment levels, and comorbidity 

subgroups for CY 2023; and update the 

CY 2023 fixed-dollar loss ratio (FDL) for 

outlier payments (so that outlier 

payments as a percentage of estimated 

total payments are not to exceed 2.5 

percent, as required by section 

1895(b)(5)(A) of the Act). This proposed 

rule also includes a solicitation of 

comments on the collection of data on 

the use of telecommunications 

technology on home health claims. 

b. Home Health (HH) Quality Reporting 

Program (QRP) 

This proposed rule proposes to end 

the suspension of the collection of 

Outcome and Assessment Information 

Set (OASIS) data on non-Medicare and 

non-Medicaid patients under section 

704 of the Medicare Prescription Drug, 

Improvement, and Modernization Act of 

2003, and to require HHAs to report allpayer OASIS data for purposes of the 

HH QRP, beginning with the CY 2025 

program year. We are proposing to 

amend the regulatory text to make a 

technical change that consolidates the 

statutory references to data submission. 

We also propose to codify in our 

regulations the factors we adopted in 

the CY 2019 HH PPS final rule as the 

factors we will consider when 

determining whether to remove 

measures from the HH QRP measure set. 

Finally, we are requesting feedback on 

a Request for Information on Health 

Equity in the HH QRP. 


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c. Expanded Home Health Value Based 

Purchasing (HHVBP) Model 

In accordance with the statutory 

authority at section 1115A of the Act, 

we are proposing updated policies, new 

definitions and modifying existing 

definitions, and conforming regulation 

text changes for the expanded Home 

Health Value-Based Purchasing 

(HHVBP) expanded Model and 

requesting comment on a potential 

future approach to health equity in the 

expanded HHVBP Model. 

d. Medicare Coverage of Home Infusion 

Therapy 

This proposed rule discusses updates 

to the home infusion therapy services 

payment rates for CY 2023 under 

section 1834(u) of the Act. 

2. Summary of the Provisions of This 

Rule 

a. Home Health Prospective Payment 

System (HH PPS) 

In section II.B.1. of this proposed rule, 

we provide monitoring and data 

analysis on PDGM utilization for CYs 

2020 and 2021. In section II.B.2. of this 

rule, we propose payment adjustments 

to reflect the impact of differences 

between assumed behavior changes and 

actual behavior changes on estimated 

aggregate payment expenditures under 

the HH PPS. In section II.B.3 of this 

rule, we discuss the proposal to reassign 

certain ICD–10–CM codes related to the 

PDGM clinical groups and comorbidity 

subgroups. 

In section II.B.4. of this rule, we are 

proposing the recalibration of the PDGM 

case-mix weights, LUPA thresholds, 

functional levels, and comorbidity 

adjustment subgroups for CY 2023. 

In section II.B.5. of this rule, we 

propose to update the home health wage 

index, the CY 2023 national, 

standardized 30-day period payment 

rates and the CY 2023 national per-visit 

payment amounts by the home health 

payment update percentage. The 

proposed home health payment update 

percentage for CY 2023 would be 2.9 

percent. This rule also proposes a 

permanent 5-percent cap on HHA’s 

applicable wage index reductions from 

their wage index from the prior year, 

regardless of the circumstances causing 

the decline. Additionally, this rule 

proposes the FDL ratio to ensure that 

aggregate outlier payments do not 

exceed 2.5 percent of the total aggregate 

payments, as required by section 

1895(b)(5)(A) of the Act. 

In section II.B.6. of this proposed rule, 

we include a comment solicitation on 

the collection of data on the use of 

telecommunications technology on 

home health claims. 

b. HH QRP 

In section III.D. of this proposed rule, 

we are proposing to end the temporary 

suspension of non-Medicare/nonMedicaid data under section 704 of the 

Medicare Prescription Drug, 

Improvement, and Modernization Act of 

2003 and, in accordance with section 

1895(b)(3)(B)(v) of the Act, to require 

HHAs to report all-payer OASIS data for 

purposes of the HH QRP, beginning 

with the CY 2025 program year. In 

section III.E. of this rule, we are 

proposing technical changes in 

§ 484.245(b)(1). In section III.F. of this 

rule, we are proposing to codify in our 

regulations the factors we adopted in 

the CY 2019 HH PPS final rule as the 

factors we will consider when 

determining whether to remove 

measures from the HH QRP measure set. 

Lastly, in section III.G. of this rule, we 

are requesting feedback on a Request for 

Information on Health Equity in the HH 

QRP. 

c. Expanded Home Health Value Based 

Purchasing (HHVBP) Model 

In section IV. of this proposed rule, 

we are proposing to change the HHA 

baseline year to CY 2022 for all HHAs 

that were certified prior to January 1, 

2022 starting in the CY 2023 

performance year. We would make 

conforming regulation text changes at 

§ 484.350(b) and (c). We are also 

proposing to amend the Model baseline 

year from CY 2019 to CY 2022 starting 

in the CY 2023 performance year to 

enable CMS to measure competing 

HHAs performance on benchmarks and 

achievement thresholds that are more 

current. We are making conforming 

amendments to definitions in § 484.345. 

In section IV.C. of this proposed rule, 

we have included an RFI related to a 

potential future approach to health 

equity in the expanded HHVBP Model. 

d. Medicare Coverage of Home Infusion 

Therapy 

In section V. of this proposed rule, we 

discuss updates to the home infusion 

therapy services payment rates for CY 

2023, under section 1834(u) of the Act. 

3. Summary of Costs, Transfers, and 

Benefits 


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37602 Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 

1http://pacioproject.org/. 

B. 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 and 

patient access to their digital health 

information. 

To further interoperability in postacute care settings, CMS and the Office 

of the National Coordinator for Health 

Information Technology (ONC) 

participate in the Post-Acute Care 

Interoperability Workgroup (PACIO) to 

facilitate collaboration with industry 

stakeholders to develop Health Level 

Seven International® (HL7) Fast 

Healthcare Interoperability Resources®

(FHIR) standards.1 These standards 

could support the exchange and reuse of 

patient assessment data derived from 

the Minimum Data Set (MDS), Inpatient 

Rehabilitation Facility-Patient 

Assessment Instrument (IRF–PAI), 

Long-term Care Hospital (LTCH) 

Continuity Assessment Record and 

Evaluation (CARE) Data Set (LCDS), 

Outcome and Assessment Information 

Set (OASIS), and other sources. The 

PACIO Project has focused on HL7 FHIR 

implementation guides for functional 

status, cognitive status and new use 

cases on advance directives, reassessment timepoints, and Speech, 

Language, Swallowing, Cognitive 

communication and Hearing 

(SPLASCH) pathology. We encourage 

PAC provider and health information 

technology (IT) vendor participation as 

the efforts advance. 

The CMS Data Element Library (DEL) 

continues to be updated and serves as 

a resource for PAC assessment data 

elements and their associated mappings 

to health IT standards, such as Logical 

Observation Identifiers Names and 

Codes (LOINC) and Systematized 

Nomenclature of Medicine Clinical 

Terms (SNOMED). The DEL furthers 

CMS’ goal of data standardization and 

interoperability. Standards in the DEL 

(https://del.cms.gov/DELWeb/pubHome) 

can be referenced on the CMS website 

and in the ONC Interoperability 

Standards Advisory (ISA). The 2022 ISA 

is available at https://www.healthit.gov/ 

isa. 

The 21st Century Cures Act (Cures 

Act) (Pub. L. 114–255, enacted 

December 13, 2016) required HHS and 

ONC to take steps to further 


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TABLE 1: SUMMARY OF COSTS, TRANSFERS, AND BENEFITS 

Provision Description Costs and C.ost Savinl!,S Transfers Benefits 

CY 2023 HH PPS Payment Rate Update The overall economic impact related to To ensure that home health 

the changes in payments under the HH payments are consistent with 

PPS for CY 2023 is estimated to be $- statutory payment authority for 

810 million (-4.2 percent). The $810 CY 2023. 

million decrease in estimated 

payments for CY 2023 reflects the 

effects of the CY 2023 home health 

payment update percentage of2.9 

percent ($560 million increase), an 

estimated -6.9 percent decrease that 

reflects the effects of the permanent 

behavioral adjustment (1.3 billion) and 

an estimated -0 .2 percent decrease that 

reflects the effects of an updated FOL 

($40 million decrease). 

HHQRP The total costs beginning in CY 

2025 is an estimated 

$267,157,680.3 based upon the 

collection of OASIS data on all 

oatients, regardless of oaver. 

Expanded HHVBP Model The overall economic impact of the 

expanded HHVBP Model for CYs 

2023 through 2027 is an estimated 

$3.376 billion in total savings to Feefor-Service (FFS) Medicare from a 

reduction in unnecessary 

hospitalizations and skilled nursing 

facility (SNF) usage as a result of 

greater quality improvements in the 

HH industry. As for payments to 

HHAs, there are no aggregate 

increases or decreases expected to he 

applied to the HHAs competing in the 

exnanded Model. 

Medicare Coverage of Home Infusion Therapy The overall economic impact of the To ensure that payment for 

stntutorily-required home infusion home infusion therapy services 

therapy payment rate updates is are consistent ,vith statutory 

expected to be minimal, based on the authority for CY 2023. 

percentage increase of the Consumer 

Price Index (CPI-U) reduced by the 

productivity adjustment. The CPI-U 

for June of 2022 was not yet available 

for this nmnosed rule. 
Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 37603 

2The Trusted Exchange Framework (TEF): 

Principles for Trusted Exchange (Jan. 2022), https:// 

www.healthit.gov/sites/default/files/page/2022-01/ 

Trusted_Exchange_Framework_0122.pdf. 

3Common Agreement for Nationwide Health 

Information Interoperability Version 1 (Jan. 2022), 

https://www.healthit.gov/sites/default/files/page/ 

2022-01/Common_Agreement_for_Nationwide_

Health_Information_Interoperability_Version_1.pdf. 

4Qualified Health Information Network (QHIN) 

Technical Framework (QTF) Version 1.0 (Jan. 2022), 

https://rce.sequoiaproject.org/wp-content/uploads/ 

2022/01/QTF_0122.pdf. 

5The Common Agreement defines Individual 

Access Services (IAS) as ‘‘with respect to the 

Exchange Purposes definition, the services 

provided utilizing the Connectivity Services, to the 

extent consistent with Applicable Law, to an 

Individual with whom the QHIN, Participant, or 

Subparticipant has a Direct Relationship to satisfy 

that Individual’s ability to access, inspect, or obtain 

a copy of that Individual’s Required Information 

that is then maintained by or for any QHIN, 

Participant, or Subparticipant.’’ The Common 

Agreement defines ‘‘IAS Provider’’ as: ‘‘Each QHIN, 

Participant, and Subparticipant that offers 

Individual Access Services.’’ See Common 

Agreement for Nationwide Health Information 

Interoperability Version 1, at 7 (Jan. 2022), https:// 

www.healthit.gov/sites/default/files/page/2022-01/ 

Common_Agreement_for_Nationwide_Health_

Information_Interoperability_Version_1.pdf. 

interoperability for providers in settings 

across the care continuum. Section 

4003(b) of the Cures Act required ONC 

to take steps to advance interoperability 

through the development of a trusted 

exchange framework and common 

agreement aimed at establishing a 

universal floor of interoperability across 

the country. On January 18, 2022, ONC 

announced a significant milestone by 

releasing the Trusted Exchange 

Framework 2 and Common Agreement 

Version 1.3 The Trusted Exchange 

Framework is a set of non-binding 

principles for health information 

exchange, and the Common Agreement 

is a contract that advances those 

principles. The Common Agreement 

and the Qualified Health Information 

Network Technical Framework Version 

1 4 (incorporated by reference into the 

Common Agreement) establish the 

technical infrastructure model and 

governing approach for different health 

information networks and their users to 

securely share clinical information with 

each other—all under commonly agreed 

to terms. The technical and policy 

architecture of how exchange occurs 

under the Trusted Exchange Framework 

and the Common Agreement follows a 

network-of-networks structure, which 

allows for connections at different levels 

and is inclusive of many different types 

of entities at those different levels, such 

as health information networks, 

healthcare practices, hospitals, public 

health agencies, and Individual Access 

Services (IAS) Providers.5 For more 

information, we refer readers to https:// 

www.healthit.gov/topic/interoperability/ 

trusted-exchange-framework-andcommon-agreement. 

We invite readers to learn more about 

these important developments and how 

they are likely to affect HHAs. 

II. Home Health Prospective Payment 

System 

A. Overview of the Home Health 

Prospective Payment System 

1. Statutory Background 

Section 1895(b)(1) of the Act requires 

the Secretary to establish a Home Health 

Prospective Payment System (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. In accordance 

with the statute, as amended by the 

Balanced Budget Act of 1997 (BBA) 

(Pub. L. 105–33, enacted August 5, 

1997), we published a final rule in the 

July 3, 2000 Federal Register (65 FR 

41128) to implement the HH PPS 

legislation. 

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 home health agencies 

(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 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 pay-for-reporting 

requirement was implemented on 

January 1, 2007. 

Section 51001(a)(1)(B) of the 

Bipartisan Budget Act of 2018 (BBA of 

2018) (Pub. L. 115–123) amended 

section 1895(b) of the Act to require a 

change to the home health unit of 

payment to 30-day periods beginning 

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 

furnished 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 the application of the 

annual update to the standard 

prospective payment amount as 

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

Act. 

Additionally, section 1895(b)(3)(A)(iv) 

of the Act requires that in calculating 

the standard prospective payment 

amount (or amounts), the Secretary 

must make assumptions about behavior 

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 behavior 

assumptions made in notice and 

comment rulemaking. CMS finalized 

these behavior assumptions in the CY 

2019 HH PPS final rule with comment 

period (83 FR 56461). 

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, to 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 


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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. Finally, 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 case-mix system for 

CY 2020 and subsequent years. 

2. Current System for Payment of Home 

Health Services 

For home health periods of care 

beginning on or after January 1, 2020, 

Medicare makes payment under the HH 

PPS on the basis of a national, 

standardized 30-day period payment 

rate that is adjusted for case-mix and 

area wage differences in accordance 

with section 51001(a)(1)(B) of the BBA 

of 2018. The national, standardized 30- 

day period payment rate includes 

payment for the six home health 

disciplines (skilled nursing, home 

health aide, physical therapy, speechlanguage pathology, occupational 

therapy, and medical social services). 

Payment for non-routine supplies (NRS) 

is also part of the national, standardized 

30-day period rate. Durable medical 

equipment (DME) provided as a home 

health service, as defined in section 

1861(m) of the Act, is paid the fee 

schedule amount or is paid through the 

competitive bidding program and such 

payment is not included in the national, 

standardized 30-day period payment 

amount. Additionally, the 30-day period 

payment rate does not include payment 

for certain injectable osteoporosis drugs 

and negative pressure wound therapy 

(NPWT) using a disposable device, but 

such drug and services must be billed 

by the HHA while a patient is under a 

home health plan of care, as the law 

requires consolidated billing of 

osteoporosis drugs and NPWT using a 

disposable device. 

To better align payment with patient 

care needs and to better ensure that 

clinically complex and ill beneficiaries 

have adequate access to home health 

care, in the CY 2019 HH PPS final rule 

with comment period (83 FR 56406), we 

finalized case-mix methodology 

refinements through the Patient-Driven 

Groupings Model (PDGM) for home 

health periods of care beginning on or 

after January 1, 2020. The PDGM did not 

change eligibility or coverage criteria for 

Medicare home health services, and as 

long as the individual meets the criteria 

for home health services as described at 

42 CFR 409.42, the individual can 

receive Medicare home health services, 

including therapy services. For more 

information about the role of therapy 

services under the PDGM, we refer 

readers to the Medicare Learning 

Network (MLN) Matters article SE2000 

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

regulations-and-guidanceguidance

transmittals2020-transmittals/se20005. 

To adjust for case-mix for 30-day 

periods of care beginning on and after 

January 1, 2020, the HH PPS uses a 432- 

category case-mix classification system 

to assign patients to a home health 

resource group (HHRG) using patient 

characteristics and other clinical 

information from Medicare claims and 

the Outcome and Assessment 

Information Set (OASIS) assessment 

instrument. These 432 HHRGs represent 

the different payment groups based on 

five main case-mix categories under the 

PDGM, as shown in Figure B1. Each 

HHRG has an associated case-mix 

weight that is used in calculating the 

payment for a 30-day period of care. For 

periods of care with visits less than the 

low-utilization payment adjustment 

(LUPA) threshold for the HHRG, 

Medicare pays national per-visit rates 

based on the discipline(s) providing the 

services. Medicare also adjusts the 

national standardized 30-day period 

payment rate for certain intervening 

events that are subject to a partial 

payment adjustment (PEP). For certain 

cases that exceed a specific cost 

threshold, an outlier adjustment may 

also be available. 

Under this case-mix methodology, 

case-mix weights are generated for each 

of the different PDGM payment groups 

by regressing resource use for each of 

the five categories (admission source, 

timing, clinical grouping, functional 

impairment level, and comorbidity 

adjustment) using a fixed effects model. 

A detailed description of each of the 

case-mix variables under the PDGM 

have been described previously, and we 

refer readers to the CY 2021 HH PPS 

final rule (85 FR 70303 through 70305). 


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B. Proposed Provisions for CY 2023 

Payment Under the HH PPS 

1. Monitoring the Effects of the 

Implementation of PDGM 

a. Routine PDGM Monitoring 

CMS routinely analyzes Medicare 

home health benefit utilization, 

including but not limited to, overall 

total 30-day periods of care and average 

periods of care per HHA user; 

distribution of the type of visits in a 30- 

day period of care; the percentage of 

periods that receive the LUPA; 

estimated costs; the percentage of 30- 

day periods of care by clinical group, 

comorbidity adjustment, admission 

source, timing, and functional 

impairment level; GG items by response 

type; and the proportion of 30-day 

periods of care with and without any 

therapy visits, nursing visits, and/or 

aide/social worker visits. For the 

monitoring included in this rule, we 

examine simulated CY 2018 and CY 

2019 data and actual CY 2020 and CY 

2021 data for 30-day periods of care. We 

provide interpretation of results for CY 

2020 and CY 2021. We refer readers to 

the CY 2022 HH PPS final rule (86 FR 

35881) for discussion about simulated 

data for CYs 2018 and 2019. 

(1) Utilization 

Table B2 shows the overall utilization 

of home health and Table B3 shows the 

average utilization of visits per 30-day 

period of care by home health 

discipline. This data indicates the 

average number of 30-day periods of 

care per unique HHA user is similar per 

30-day period of care between CY 2020 

and CY 2021. Table B3 shows 

utilization of visits per 30-day period of 

care by home health discipline over 

time. The data indicates that the number 

of 30-day periods of care decreased 

between CY 2018 and CY 2021. Table 

B4 shows the proportion of 30-day 

periods of care that are LUPAs and the 

average number of visits per discipline 

of those LUPA 30-day periods of care 

over time. 

BILLING CODE 4120–01–P 


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FIGURE Bl: CASE-MIX VARIABLES IN THE PDGM 

Admission Source and Timing (From Claims) 

Cornmunity 

Early 

Cornrnun1tv 

Late 

Institutional 

Earlv 

Institutional 

Late 

Clinical Grouping (From Principal Diagnosis Reported on Claim) 

Neuro 

Rehab 

MMTASurgical 

Aftercare 

Wounds 

MMTA -

Cardiac and 

C1 rculatory 

Complex 

Nursing 

Interventions 

MMTAEndocnne 

MS 

Rehab 

MMTAGI/GU 

8f'hav1ora! 

Health 

MMTA -

lnfe;:tious 

Diseas,s, 

MMTA • 

Other 

MMTA -

Respiratory 

Functional Impairment Level (From OASIS Items) - - - -- - - ~ - ~ 

Medium High 

Comorbidity Adjustment (From Secondary Diagnoses 

Reported on Claims) - - -- ----- ---- -- - -- ------- --- - -- --- -------- ---

None High 

..... 

HHRG 

(Home Health Resource Group) 
37606 Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 


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TABLE B2: OVERALL UTILIZATION OF HOME HEALTH SERVICES, 

CYs 2018-2021 

Volume of Periods and Number of CY2018 CY 2019 CY 2020 CY 2021 Beneficiaries (Simulated) (Simulated) 

30-Dav Periods of Care 9.336,898 8 744 171 8 423 688 8 962 690 

Unique Beneficiaries 2 980,385 2 802,560 2,850,916 2,944,305 

Average Number of 30-Day Periods per 3.13 3.12 2.95 3.04 Unique Beneficiary 

Source: CY 2018 and CY 2019 simulated PDGM data with behavioral assumptions came from the Home Health 

Limited Data Set (LDS). CY 2020 PDGM data was accessed from the Chronic Conditions Data Warehouse (CCW) 

Virtual Research Data Center (VRDC) on July 12, 2021. CY 2021 PDGM data was accessed from the CCW VRDC 

on March 21, 2022. 

Note: There are approximately 540,000 60-day episodes that started in 2019 and ended in 2020 that are not included 

in the analysis. 

TABLE B3: UTILIZATION OF VISITS PER 30-DAY PERIODS OF CARE BY HOME 

HEALTH DISCIPLINE, CYs 2018-2021 

Discipline CY 2018 CY2019 CY 2020 CY 2021 (Simulated) (Simulated) 

Skilled Nursing 4.53 4.49 4.35 4.05 

Phvsical Theranv 3.30 3.33 2.70 2.73 

Occupational Theranv 1.02 1.07 0.79 0.77 

Speech Therapy 0.21 0.21 0.16 0.15 

Home Health Aide 0.72 0.67 0.54 0.47 

Social Worker 0.08 0.08 0.06 0.05 

Total (all disciolines) 9.86 9.85 8.60 8.22 

Source: CY 2018 and CY 2019 simulated PDGM data with behavior assumptions came from the Home Health 

LDS. CY 2020 PDGM data was accessed from the CCW VRDC on July 12, 2021. CY 2021 PDGM data was 

accessed from the CCW VRDC on March 21, 2022. 

Note: There are approximately 540,000 60-day episodes that started in 2019 and ended in 2020 that are not included 

in the analysis. 
Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 37607 

6http://www.medpac.gov/docs/default-source/ 

reports/mar20_medpac_ch9_sec.pdf?sfvrsn=0. 

BILLING CODE 4120–01–C 

(2) Analysis of 2020 Cost Report Data for 

30-Day Periods of Care 

In the CY 2020 HH PPS final rule with 

comment period (84 FR 60483), we 

provided a summary of analysis on FY 

2017 HHA cost report data and how 

such data, if used, would impact our 

estimate of the percentage difference 

between the CY 2020 30-day payment 

amount and estimated, average HHA 

costs for a 30-day period of care. In that 

rule, we utilized FY 2017 cost reports 

and CY 2017 home health claims to 

estimate the costs of both 60-day 

episodes of care and 30-day periods of 

care. We then updated the estimated CY 

2017 60-day episode costs and 30-day 

period of care costs by the home health 

market basket update, reduced by the 

productivity adjustment for CYs 2018, 

2019, and 2020 to calculate the 2020 

estimated 60-day episode costs and 30- 

day period of care costs. As stated in the 

CY 2020 HH PPS final rule with 

comment period (84 FR 60485), we 

estimated that the CY 2020 30-day 

payment amount was approximately 16 

percent higher than the average costs for 

a 30-day period of care. In MedPAC’s 

March 2020 Report to Congress,6 their 

review of home health payment 

adequacy found that ‘‘access is more 

than adequate in most areas and that 

Medicare payments are substantially in 

excess of costs’’. 

In this proposed rule, we examined 

2020 HHA Medicare cost reports, as this 

is the most recent and complete cost 

report data at the time of rulemaking, 

and CY 2021 home health claims, to 

estimate 30-day period of care costs. We 

excluded LUPAs and PEPs in the 

average number of visits. The 2020 

average NRS costs per visit is $4.53. To 

update the estimated 30-day period of 

care costs, we begin with the 2020 

average costs per visit with NRS for 

each discipline and multiply that 

amount by the CY 2021 home health 

payment update percentage of 2.0 

percent. That amount for each 

discipline is then multiplied by the 

2021 average number of visits by 

discipline to determine the 2021 

Estimated 30-day Period Costs. Table B5 

shows the estimated average costs for 

30-day periods of care by discipline 

with NRS and the total 30-day period of 

care costs with NRS for CY 2021. 


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TABLE B4: THE PROPORTION OF 30-DAY PERIODS OF CARE THAT ARE LUPAs 

AND THE AVERAGE NUMBER OF VISITS BY HOME HEALTH DISCIPLINE 

FOR LUPA HOME HEALTH PERIODS, CYs 2018-2021 

CY2018 CY 2019 CY 2020 CY2021 (Simulated) (Simulated) 

Total LUPA % ofOverall 30-day Periods 6.7% 6.8% 8.7% 7.8% 

Discipline (Average# visits for LUP A home health periods) 

Skilled Nursing 1.15 1.14 1.19 

Physical Therapy 0.43 0.46 0.53 

Occupational Theraov 0.07 0.07 0.08 

Speech Theraoy 0.02 0.02 0.02 

Home Health Aide 0.01 0.01 0.01 

Social Worker 0.01 0.01 0.01 

Total 1.69 1.71 1.84 

Source: CY 2018 and CY 2019 simulated PDGM data with behavioral assumptions came from the Home Health 

LDS. CY 2020 PDGM data was accessed from the CCW VRDC on July 12, 2021. CY 2021 PDGM data was 

accessed from the CCW VRDC on March 21, 2022. 

1.12 

0.55 

0.08 

0.02 

0.01 

0.01 

1.78 

Note: There are approximately 540,000 60-day episodes that started in 2019 and ended in 2020 that are not included 

in the analysis. 
37608 Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 

7https://www.medpac.gov/wp-content/uploads/ 

2022/03/Mar22_MedPAC_ReportToCongress_Ch8_

SEC.pdf. 

The CY 2021 national, standardized 

30-day period payment rate was 

$1,901.12, which is approximately 34 

percent more than the estimated CY 

2021 30-day period average facility cost 

of $1,420.35. Note that in the CY 2020 

HH PPS final rule with comment period 

(84 FR 60484), the average number of 

visits for a 30-day period of care in 2017 

was estimated to be 10.5 visits for nonLUPA, non-PEP 30-day periods of care. 

Using actual CY 2021 claims data, the 

average number of visits in a non-LUPAnon-PEP 30-day period of care was 8.81 

visits—a decrease of approximately 16 

percent. We recognize that with the 

COVID–19 public health emergency 

(PHE), the 2020 data on the Medicare 

cost reports may not reflect the most 

recent changes such as increased 

telecommunications technology costs, 

increased personal protective 

equipment (PPE) costs, and hazard pay. 

In its March 2022 Report to Congress, 

MedPAC assumed a cost growth of 3.47 

percent for both CY 2021 and CY 2027.7

Furthermore, MedPAC noted that for 

more than a decade, payments under the 

HH PPS have significantly exceeded 

HHAs’ costs primarily due to two 

factors. First, agencies have reduced the 

average number of visits per episode to 

reduce episode costs. Second, cost 

growth in recent years has been lower 

than the annual payment updates. As 

shown in Table B3 in this proposed 

rule, HHAs have reduced visits under 

the PDGM in CY 2021. 

(3) Clinical Groupings and 

Comorbidities 

Each 30-day period of care is grouped 

into one of 12 clinical groups, which 

describe the primary reason for which a 

patient is receiving home health 

services under the Medicare home 

health benefit. The clinical grouping is 

based on the principal diagnosis 

reported on the home health claim. 

Table B6 shows the distribution of the 

12 clinical groups over time. 


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TABLE BS: ESTIMATED COSTS FOR 30-DAY PERIODS OF CARE IN CY 2021 

2020 2021 2021 2021 

Average Costs per Home Health Average Number Estimated 30-Day 

Discipline visit with NRS Pavment Update of Visits Period Costs 

Skilled Nursin_g $154.77 1.02 4.30 $678.82 

Physical Therapy $170.04 1.02 2.93 $508.18 

Occupational Therapy $165.86 1.02 0.84 $142.11 

Speech Patholoizv $192.39 1.02 0.16 $31.40 

Medical Social Services $264.92 1.02 0.06 $16.21 

Home Health Aides $82.25 1.02 0.52 $43.63 

Total $1,420.35 

Source: 2020 Medicare cost report data obtained on January 18, 2022. Home health visit information came from 

30-day periods of care with a through date in CY 2021 (obtained from the CCW VRDC on March 21, 2022). 

Notes: The 2021 average number of visits excludes LUP As and PEPs. 
Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 37609 

Thirty-day periods of care will receive 

a comorbidity adjustment category 

based on the presence of certain 

secondary diagnoses reported on home 

health claims. These diagnoses are 

based on a home health specific list of 

clinically and statistically significant 

secondary diagnosis subgroups with 

similar resource use. We refer readers to 

section II.B.4.c. of this proposed rule 

and the CY 2020 final rule with 

comment period (84 FR 60493) for 

further information on the comorbidity 

adjustment categories. Home health 30- 

day periods of care can receive a low or 

a high comorbidity adjustment, or no 

comorbidity adjustment. Table B7 

shows the distribution of 30-day periods 

of care by comorbidity adjustment 

category for all 30-day periods. 

(4) Admission Source and Timing 

Each 30-day period of care is 

classified into one of two admission 

source categories—community or 

institutional—depending on what 

healthcare setting was utilized in the 14 

days prior to receiving home health 

care. Thirty-day periods of care for 

beneficiaries with any inpatient acute 

care hospitalizations, inpatient 

psychiatric facility (IPF) stays, skilled 

nursing facility (SNF) stays, inpatient 

rehabilitation facility (IRF) stays, or 

long-term care hospital (LTCH) stays 

within 14-days prior to a home health 

admission will be designated as 

institutional admissions. The 

institutional admission source category 

will 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. 

Thirty-day periods of care are 

classified as ‘‘early’’ or ‘‘late’’ depending 


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TABLE B6: DISTRIBUTION OF 30-DAY PERIODS OF CARE BY THE 12 PDGM 

CLINICAL GROUPS, CYs 2018-2021 

CY 2018 CY2019 

Clinical Groupin2 (Simulated) (Simulated) CY 2020 CY2021 

Behavioral Health 1.7% 1.5% 2.3% 2.4% 

Complex Nursing 2.6% 2.5% 3.5% 3.3% 

MMTA - Cardiac 16.5% 16.1% 18.9% 18.5% 

MMTA - Endocrine 17.3% 17.4% 7.2% 6.9% 

MMTA-GI/GU 2.2% 2.3% 4.7% 4.7% 

MMTA - Infectious 2.9% 2.7% 4.8% 4.6% 

MMTA-Other 4.7% 4.7% 3.1% 3.6% 

MMTA - Respiratory 4.3% 4.1% 7.8% 8.0% 

MMTA - Surgical Aftercare 1.8% 1.8% 3.6% 3.4% 

MS Rehab 17.1% 17.3% 19.4% 19.8% 

NeuroRehab 14.4% 14.5% 10.5% 10.9% 

Wounds 14.5% 15.1% 14.2% 13.9% 

Source: CY 2018 and CY 2019 simulated PDGM data with behavioral assumptions came from the Home Health 

LDS. CY 2020 PDGM data was accessed from the CCW VRDC on July 12, 2021. CY 2021 PDGM data was 

accessed from the CCW VRDC on March 21, 2022. 

Note: There are approximately 540,000 60-day episodes that started in 2019 and ended in 2020 that are not included 

in the analysis. 

TABLE B7: DISTRIBUTION OF 30-DAY PERIODS OF CARE BY COMORBIDITY 

ADJUSTMENT CATEGORY FOR 30-DAY PERIODS, CYs 2018-2021 

Comorbidity CY2018 CY2019 

Ad.iustment (Simulated) (Simulated) CY2020 CY2021 

None 55.6% 52.0% 49.1% 49.6% 

Low 35.3% 38.0% 36.9% 36.9% 

High 9.2% 10.0% 14.0% 13.5% 

Source: CY 2018 and CY 2019 simulated PDGM data with behavioral assumptions came from the Home Health 

LDS. CY 2020 PDGM data was accessed from the CCW VRDC on July 12, 2021. CY 2021 PDGM data was 

accessed from the CCW VRDC on March 21, 2022. 

Note: There are approximately 540,000 60-day episodes that started in 2019 and ended in 2020 that are not included 

in the analysis. 
37610 Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 

8https://www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/HomeHealthPPS/HH-PDGM. 

on when they occur within a sequence 

of 30-day periods of care. The first 30- 

day period of care is classified as early 

and all subsequent 30-day periods of 

care in the sequence (second or later) 

are classified as late. A subsequent 30- 

day period of care would not be 

considered early unless there is a gap of 

more than 60 days between the end of 

one previous period of care and the start 

of another. Information regarding the 

timing of a 30-day period of care comes 

from Medicare home health claims data 

and not the OASIS assessment to 

determine if a 30-day period of care is 

‘‘early’’ or ‘‘late’’. Table B8 shows the 

distribution of 30-day periods of care by 

admission source and timing. 

(5) Functional Impairment Level 

Each 30-day period of care is placed 

into one of three functional impairment 

levels (low, medium, or high) based on 

responses to certain OASIS functional 

items associated with grooming, 

bathing, dressing, ambulating, 

transferring, and risk for hospitalization. 

The specific OASIS items that are used 

for the functional impairment level are 

found in Table B7 in the CY 2020 HH 

PPS final rule with comment period (84 

FR 60490). Responses to these OASIS 

items are grouped together into response 

categories with similar resource use and 

each response category has associated 

points. A more detailed description as 

to how these response categories were 

established can be found in the 

technical report, ‘‘Overview of the 

Home Health Groupings Model’’ posted 

on the HHA web page.8 The sum of 

these points results in a functional 

impairment score used to group 30-day 

periods of care into a functional 

impairment level with similar resource 

use. The scores associated with the 

functional impairment levels vary by 

clinical group to account for differences 

in resource utilization. A patient’s 

functional impairment level will remain 

the same for the first and second 30-day 

periods of care unless there is a 

significant change in condition that 

warrants an ‘‘other follow-up’’ 

assessment prior to the second 30-day 

period of care. For each 30-day period 

of care, the Medicare claims processing 

system will look for occurrence code 50 

on the claim to correspond to the M0090 

date of the applicable assessment. Table 

B9 shows the distribution of 30-day 

periods by functional impairment level. 


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TABLE BS: DISTRIBUTION OF 30-DAY PERIODS OF CARE BY ADMISSION 

SOURCE AND PERIOD TIMING, CYs 2018-2021 

Admission Period CY 2018 CY2019 

Source Timine: (Simulated) (Simulated) CY2020 CY 2021 

Community Early 13.5% 13.8% 12.4% 11.6% 

Communitv Late 61.1% 60.9% 61.8% 63.9% 

Institutional Early 18.6% 18.4% 20.0% 18.6% 

Institutional Late 6.8% 6.9% 5.8% 5.9% 

Source: CY 2018 and CY 2019 simulated PDGM data with behavioral assumptions came from the Home Health 

LDS. CY 2020 PDGM data was accessed from the CCW VRDC on July 12, 2021. CY 2021 PDGM data was 

accessed from the CCW VRDC on March 21, 2022. 

Note: There are approximately 540,000 60-day episodes that started in 2019 and ended in 2020 that are not included 

in the analysis. 

TABLE B9: DISTRIBUTION OF 30-DAY PERIODS OF CARE BY FUNCTIONAL 

IMPAIRMENT LEVEL, CYs 2018-2021 

Functional Impairment Level CY 2018 CY2019 CY2020 CY 2021 (Simulated) (Simulated) 

Low 33.9% 31.9% 25.7% 23.2% 

Medium 34.9% 35.5% 32.7% 32.6% 

High 31.2% 32.6% 41.7% 44.2% 

Source: CY 2018 and CY 2019 simulated PDGM data with behavioral assumptions came from the Home Health 

LDS. CY 2020 PDGM data was accessed from the CCW VRDC on July 12, 2021. CY 2021 PDGM data was 

accessed from the CCW VRDC on March 21, 2022. 

Note: There are approximately 540,000 60-day episodes that started in 2019 and ended in 2020 that are not included 

in the analysis. 
Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 37611 

(6) CY 2023 Discussion and Analysis of 

GG Items 

The Improving Medicare Post-Acute 

Care Transformation Act of 2014 

(IMPACT Act) (Pub. L. 113–185, enacted 

on October 6, 2014) amended Title XVIII 

of the Act to include new data reporting 

requirements for certain post-acute care 

(PAC) providers, such as HHAs. Section 

1899B(b)(1)(A) of the Act requires that 

HHAs report standardized patient 

assessment data beginning no later than 

January 1, 2019. Since the standardized 

patient assessment data categories 

included functional status, such as 

mobility and self-care at admission and 

discharge, in accordance with section 

1899B(b)(1)(B)(i) of the Act, CMS 

finalized adding the functional items, 

Section GG, ‘‘Functional Abilities and 

Goals’’, to the OASIS data set, effective 

January 1, 2019, in order to measure 

functional status across PAC providers. 

However, for payment purposes under 

the PDGM, CMS did 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. 

Therefore, the GG functional items are 

not currently used to determine the 

functional impairment level under the 

PDGM. CMS continues to use the 

M1800–1860 items to determine 

functional impairment level for casemix purposes. As such, the purpose of 

the following analysis is to explore the 

relationship between the M1800–1860 

items used in the PDGM and the 

analogous GG items. The analysis of the 

M1800 functional items and the 

analogous GG items shows there was a 

small decline in the percentage of 

individuals who were associated with 

the ‘‘most independent’’ responses with 

a large percentage of the responses using 

the ‘‘Activity not Attempted’’ (ANA) 

response option. If the activity was not 

attempted, there are various codes that 

explain the reason for this response, 

such as ‘‘Not attempted due to medical 

or safety concerns,’’ and ‘‘Not 

applicable.’’ 

To conduct this analysis, we reviewed 

OASIS data from January 1, 2019, to 

December 31, 2021, that was linked to 

30-day home health periods. Responses 

for each of the M1800 functional items 

used in the PDGM functional scores 

were compared to the responses of the 

analogous GG items. There is a 

correlation between the current 

responses to the M1800–1860 items and 

the GG items; however, certain 

information in the M1800 items is 

collected at follow—up, but is not 

collected at follow-up for the GG items 

(for example, the M1800 items 

associated with upper and lower body 

dressing are collected at follow up, but 

the analogous GG item is not collected 

at follow-up). Additionally, ongoing 

analysis of the GG items shows a 

significant amount of ANA responses, 

making it difficult to map to the 

corresponding M1800–1860 item 

responses. Figure B2 demonstrates the 

frequencies by response type in CY 2021 

of the OASIS GG items. 

BILLING CODE 4120–01–P 


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FIGURE B2: OASIS GG ITEM FREQUENCIES BY RESPONSE TYPE IN CY 2021 

90% 

10'% 

I 60% 

:. 

~ 50% 

1: I 40% 

30% 

10'6 

0% 

.% Periods with Response of Activity Not Attempted (07, 09, 10, 88, -), Skip, or Not Collected on follow-up Assessment 

• % Periods with Response (01 to 06) 

OASISGGltem 

Source: CY 2021 home health periods linked to OASIS data accessed from the CCW VRDC in March 2022. 

Sample composed of 8,944,681 home health periods ending in 2021. +Item is not collected on the follow-up 

assessment. Please note: *Item is skipped if a prior item has an "Activity Not Attempted" (07, 09, 10, 88, -) 

response. Wheel 50 and Wheel 150 are skipped if the patient is not indicated as using a wheelchair. 
37612 Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 

9Medicare Benefit Policy Manual, Chapter 7 

Home Health Services, Section 40.2 Skilled 

Therapy Services https://www.cms.gov/Regulations- and-Guidance/Guidance/Manuals/Downloads/ 

bp102c07.pdf. 

(7) Therapy Visits 

Beginning in CY 2020, section 

1895(b)(4)(B)(ii) of the Act eliminated 

the use of therapy thresholds in 

calculating payments for CY 2020 and 

subsequent years. Prior to 

implementation of the PDGM, HHAs 

could receive an adjustment to payment 

based on the number of therapy visits 

provided during a 60-day episode of 

care. We examined the proportion of 

actual 30-day periods of care with and 

without therapy visits. To be covered as 

skilled therapy, the services must 

require the skills of a qualified therapist 

(that is, physical therapy (PT), 

occupational therapy (OT), or speechlanguage pathology (SLP)) or qualified 

therapist assistant and must be 

reasonable and necessary for the 

treatment of the patient’s illness or 

injury.9 As shown in Table B2, we 

monitor the number of visits per 30-day 

period of care by each home health 

discipline. Any 30-day period of care 

can include both therapy and nontherapy visits. If any 30-day period of 

care consisted of only visits for PT, OT, 

and/or SLP, then this 30-day period of 

care is considered ‘‘therapy only’’. If any 

30-day period of care consisted of only 

visits for skilled nursing, home health 

aide, or social worker, then this 30-day 

period of care is considered ‘‘no 

therapy’’. If any 30-day period of care 

consisted of at least one therapy visit 

and one non-therapy, then this 30-day 

period of care is considered ‘‘therapy + 

non-therapy’’. Table B10 shows the 

proportion of 30-day periods of care 

with only therapy visits, at least one 

therapy visit and one non-therapy visit, 

and no therapy visits. Figure B3 shows 

the proportion of 30-day periods of care 

by the number of therapy visits 

(excluding zero) provided during 30-day 

periods of care. 


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TABLE BlO: PROPORTION OF 30-DAY PERIODS OF CARE WITH ONLY 

THERAPY, AT LEAST ONE THERAPY VISIT, AND NO THERAPY VISITS FOR CYs 

2018-2021 

30-day Period Visit CY 2018 CY 2019 CY 2020 CY 2021 Type (Simulated) (Simulated) 

Therapy Only 13.5% 14.4% 15.2% 17.8% 

Therapy+ Non-therapy 48.2% 48.4% 42.2% 42.3% 

No Therapy 38.3% 37.2% 42.6% 39.9% 

Total 30-day periods 9,336,898 8,744,171 8,423,688 8,962,690 

Source: CY 2018 and CY 2019 simulated PDGM data with behavioral assumptions came from the Home Health 

LDS. CY 2020 PDGM data was accessed from the CCW VRDC on July 12, 2021. CY 2021 PDGM data was 

accessed from the CCW VRDC on March 21, 2022. 

Note: There are approximately 540,000 60-day episodes that started in 2019 and ended in 2020 that are not 

included in the analysis. 
Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 37613 

Both Table B10 and Figure B3, as 

previously discussed, indicate there 

have been changes in the distribution of 

both therapy and non-therapy visits in 

CY 2021 compared to CY 2020. For 

example, the percent of 30-day periods 

with seven or less therapy visits during 

a 30-day period increased in CY 2021 

compared to CY 2020. 

In addition, we also examined the 

proportion of 30-day periods of care 

with and without skilled nursing, social 

work, or home health aide visits. Table 

B11 shows the number of 30-day 

periods of care with only skilled nursing 

visits, at least one skilled nursing visit 

and one other visit type (therapy or nontherapy), and no skilled nursing visits. 

Table B12 shows the number of 30-day 

periods of care with and without home 

health aide and/or social worker visits. 


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FIGURE B3: PROPORTION OF 30-DAY PERIODS OF CARE BY 

THE NUMBER OF THERAPY VISITS DURING 30-DAY PERIODS, CYs 2018-2021 

9.0% 

8.0% 

,{g 7.0% 0 

·.::: 

~ 6.0% 

> 

~ 5.0% 

6 

: 4.0% 0 

+-' ffi 3.0% u 

~ 2.0% 

1.0% 

0.0% 

1 

••tlll•• 2020 -e--2021 """'Ali!- 2018(Simulated) ♦- 2019(Simulated) 

2 3 4 5 6 7 8 9 10 11 12 13+ 

Number ofTherapy Visits During 30-day Periods 

Source: CY 2018 and CY 2019 simulated PDGM data with behavioral assumptions came from the Home Health 

LDS. CY 2020 PDGM data was accessed from the CCW VRDC on July 12, 2021. CY 2021 PDGM data was 

accessed from the CCW VRDC on March 21, 2022. 

Note: There are approximately 540,000 60-day episodes that started in 2019 and ended in 2020 that are not included 

in the analysis. Thirty-day periods with ~13 therapy visits were combined into one category for illustrative purposes 

only. 

TABLE Bll: PROPORTION OF 30-DAY PERIODS OF CARE WITH ONLY 

SKILLED NURSING, SKILLED NURSING+ OTHER VISIT TYPE, AND NO SKILLED 

NURSING VISITS FOR CYs 2018-2021 

CY 2018 CY 2019 

30-day Period Visit Type (Simulated) (Simulated) CY 2020 CY 2021 

Skilled Nursing Only 33.8% 33.1% 38.5% 36.2% 

Skilled Nursing + Other 51.6% 51.5% 45.3% 44.9% 

No Skilled Nursing 14.7% 15.5% 16.2% 18.9% 

Total 30-day periods 9,336,898 8,744,171 8,423,688 8,962,690 

Source: CY 2018 and CY 2019 simulated PDGM data with behavioral assumptions came from the Home Health 

LDS. CY 2020 PDGM data was accessed from the CCW VRDC on July 12, 2021. CY 2021 PDGM data was 

accessed from the CCW VRDC on March 21, 2022. 

Note: There are approximately 540,000 60-day episodes that started in 2019 and ended in 2020 that are not included 

in the analysis. 
37614 Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 

BILLING CODE 4120–01–C 

We will continue to monitor the 

provision of home health services, 

including any changes in the number 

and duration of home health visits, 

composition of the disciplines 

providing such services, and overall 

home health payments to determine if 

refinements to the case-mix adjustment 

methodology may be needed in the 

future. 

2. Proposed Methodology for Behavioral 

Assumptions and Adjustments Under 

the HH PPS, 

a. Background and Comment 

Solicitation From the CY 2022 HH PPS 

Proposed Rule 

(1) Background 

As discussed in section II.A.1. of this 

rule, starting in CY 2020, the Secretary 

was statutorily required to change the 

unit of payment under the HH PPS from 

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

period of care. CMS was also required 

to make assumptions about behavior 

changes that could occur as a result of 

the implementation of the 30-day unit of 

payment and the case-mix adjustment 

factors that eliminated the use of 

therapy thresholds, when calculating 

the standard prospective payment 

amount for CY 2020. In the CY 2019 HH 

PPS final rule with comment period (83 

FR 56455), we finalized the following 

three behavior assumptions: 

• Clinical Group Coding: The clinical 

group is determined by the principal 

diagnosis code for the patient as 

reported by the HHA on the home 

health claim. This behavior assumption 

assumes that HHAs will change their 

documentation and coding practices 

and 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. 

• Comorbidity Coding: The PDGM 

further adjusts payments based on 

patients’ secondary diagnoses as 

reported by the HHA on the home 

health claim. The OASIS only allows 

HHAs to designate 1 principal diagnosis 

and 5 secondary diagnoses while the 

home health claim allows HHAs to 

designate 1 principal diagnosis and up 

to 24 secondary diagnoses. This 

behavior assumption assumes that by 

considering 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. 

• LUPA Threshold: This behavior 

assumption assumes 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. 

As described in the CY 2020 final rule 

with comment period (84 FR 60512), in 

order to calculate the CY 2020 budget 

neutral 30-day payment amounts both 

with and without behavior assumptions, 

we first calculated the total, aggregate 

amount of expenditures that would 

occur under the pre-PDGM case-mix 

adjustment methodology (60-day 

episodes under 153 case-mix groups). 

We then calculated what the 30-day 

payment amount would need to be set 

at in order for CMS to pay the same total 

expenditures in CY 2020 with the 

application of a 30-day unit of payment 

under the PDGM. 

We initially determined a negative 

8.39 percent behavior change 

adjustment to the base payment rate 

would be needed in order to ensure that 

the payment rate in CY 2020 would be 

budget neutral, as required by law. 

However, based on the comments 

received and reconsideration as to the 

frequency of the assumed behaviors 

during the first year of the transition to 

a new unit of payment and case-mix 

adjustment methodology, we finalized 

in the CY 2020 HH PPS final rule with 

comment period (84 FR 60519) a 

negative 4.36 percent behavior change 

assumption adjustment (‘‘assumed 

behaviors’’) in order to calculate the 30- 

day payment rate in a budget-neutral 

manner for CY 2020. After applying the 

wage index budget neutrality factor and 

the home health payment update, the 

CY 2020 30-day payment rate was set at 

$1,864.03. 

Our data analysis in section II.B.1. of 

this proposed rule compares the 2018 

simulated 30-day periods with behavior 

assumptions applied and actual 30-day 

periods. Specifically, Tables B4, B6, and 

B7 indicate that the three assumed 

behavior changes did occur as a result 

of the implementation of the PDGM. 

Additionally, this monitoring shows 

that other behaviors, such as changes in 

the provision of therapy and changes in 

functional impairment levels also 

occurred. Overall, the actual 30-day 

periods are similar to the simulated 30- 

day periods, which is supporting 

evidence that HHAs did make 

behavioral changes. However, we 

remind readers that by law we are 

required to ensure 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. Regardless of the magnitude 

and frequency of individual behavior 

change (for example, LUPAs, therapy, 

etc.), the occurrence of any behavior 

change is captured by the methodology 

to determine the impact on aggregate 

expenditures. 

We remind readers that in the CY 

2020 HH PPS final rule (84 FR 60513), 

we stated that we interpret actual 

behavior changes to encompass both 

behavior changes that were previously 

outlined as assumed by CMS, and other 

behavior changes not identified at the 


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TABLE B12: PROPORTION OF 30-DAY PERIODS OF CARE WITH AND 

WITHOUT HOME HEALTH AIDE AND/OR SOCIAL WORKER VISITS FOR CYs 

2018-2021 

CY 2018 CY 2019 

30-day Period Visit Type (Simulated) (Simulated) CY 2020 CY 2021 

Any HH aide and/or social worker 16.6% 15.9% 13.2% 12.2% 

No HH aide and/or social worker 83.4% 84.1% 86.8% 87.8% 

Total 30-day periods 9,336,898 8,744,171 8,423,688 8,962,690 

Source: CY 2018 and CY 2019 simulated PDGM data with behavioral assumptions came from the Home Health 

LDS. CY 2020 PDGM data was accessed from the CCW VRDC on July 12, 2021. CY 2021 PDGM data was 

accessed from the CCW VRDC on March 21, 2022. 

Note: There are approximately 540,000 60-day episodes that started in 2019 and ended in 2020 that are not included 

in the analysis. 
Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 37615 

time the budget-neutral 30-day payment 

rate for CY 2020 was established. 

Subsequently, our analysis resulted in 

the identification of other behavior 

changes that occurred after the 

implementation of the PDGM. For 

example, Table B10 and Figure B3 in 

section II.B.1. of this proposed rule 

indicates the number of therapy visits 

declined in CYs 2020 and 2021. 

However, the data, as depicted in Figure 

B3, also indicates a slight decline in 

therapy visits began in CY 2019 after the 

finalization of the removal of therapy 

thresholds, but prior to implementation 

of the PDGM. This suggests HHAs were 

already beginning to decrease their 

therapy provision. Although not 

originally one of the three finalized 

behavior assumptions, the decline in 

therapy utilization is indicative of an 

additional behavior change. 

Each Health Insurance Prospective 

Payment System (HIPPS) code is 

assigned a case-mix weight and the 

case-mix weight determines the base 

payment of non-LUPA claims prior to 

any other adjustments (for example 

outlier). Prior to the PDGM, the first 

position of the HIPPS code was a 

numeric value that represented the 

interaction of episode timing and 

number of therapy visits (grouping 

step). The second, third, and fourth 

positions of the pre-PDGM HIPPS code 

reflected clinical severity, functional 

severity, and service utilization 

respectively. Therefore, to evaluate how 

the decrease in therapy visits related to 

payments, we compared the average 

case mix weights of CY 2018 actual 60- 

day episodes and CY 2021 simulated 60- 

day episodes. Prior to the PDGM, the 

average case-mix weight for CY 2018 60- 

day episodes was 1.0176. When we set 

therapy levels at the pre-PDGM (that is, 

CY 2018) level and kept the clinical and 

functional levels at the PDGM levels 

(that is, CY 2021) the average case-mix 

weight was 1.0389. After the PDGM, the 

average case-mix weight for CY 2021 

simulated 60-day episodes was 0.9664. 

When we kept therapy levels at the 

PDGM (that is, CY 2021) level and set 

the clinical and functional levels at the 

pre-PDGM levels (that is, CY 2018) the 

average case-mix weight was 0.9361. By 

controlling for therapy levels, we were 

able to determine the change in 60-day 

episode case-mix weights were largely 

driven by therapy utilization. The 

decrease in therapy visits led to a 

decrease in case-mix weight, and 

therefore a decrease in aggregate 

expenditures under the pre-PDGM HH 

PPS. 

(2) Summary of Comment Solicitation 

From the CY 2022 Proposed Rule 

As required by section 1895(b)(3)(D)(i) 

of the Act, CMS must annually 

determine the impact of differences 

between assumed 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) and (iii) of the Act 

requires that CMS make permanent and 

temporary adjustments to the payment 

rate to offset for such increases or 

decreases in estimated aggregate 

expenditures through notice and 

comment rulemaking. Therefore, to 

evaluate the impact of assumed versus 

actual behavior changes for CYs 2020 

through 2026, we developed a 

methodology that uses actual claims 

data for 30-day periods under the 432- 

group case-mix model (PDGM claims) to 

simulate 60-day episodes under the 153- 

group case-mix model (representing prePDGM HH PPS claims) in order to 

estimate what aggregate expenditures 

would have been in the absence of the 

PDGM. This methodology mirrors the 

initial approach used to calculate the 

CY 2020 30-day period payment amount 

for the PDGM, where we used a single 

year of claims data (that is, CY 2018 

claims data for 60-day episodes of care 

under the 153-group case-mix model) 

and simulated payments for 30-day 

periods of care with the application of 

the PDGM case-mix adjustment 

methodology. We then compared actual 

aggregate expenditures under the 

existing system (that is, 60-day episodes 

of care under the 153-group case-mix 

model) to simulated payments under the 

PDGM for 30-day periods of care with 

assumed behavior changes, and used the 

difference between the two amounts to 

construct the budget neutrality factor. 

We described this methodology in the 

CY 2022 HH PPS proposed rule (86 FR 

35889 through 35892). For determining 

the impact of the difference between 

assumed and actual behavior changes 

on overall expenditures for CY 2020 and 

CY 2021, we analyzed a single year of 

claims data (for example, CY 2020 

claims data for 30-day periods of care 

under the 432-group PDGM case-mix 

model) and simulated payments for 60- 

day episodes of care under the 153- 

group case-mix model. We then 

compared the actual aggregate 

expenditures under the PDGM to what 

aggregate expenditures would have been 

pre-PDGM. 

In the CY 2022 HH PPS proposed rule 

(86 FR 35892), we solicited comments 

on this approach (86 FR 35892). 

Commenters raised concerns about this 

methodology, most notably about the 

elimination of therapy thresholds, the 

onset of the COVID–19 PHE, 

interpretation of section 1895(b)(3)(D)(i) 

of the Act, the differing case-mix weight 

systems (153 vs 432 case-mix groups), 

and inappropriate data exclusions and 

assumptions when creating the 

simulated 60-day episodes. 

Commenters stated that there has 

been a large decrease in therapy 

utilization since the implementation of 

the PDGM. Commenters stated several 

possible reasons for the decrease in 

therapy utilization, including that the 

PDGM resulted in significant differences 

in payment incentives. Specifically, 

commenters noted that HHAs could 

have received higher payments if certain 

therapy volume thresholds were met 

pre-PDGM; whereas that incentive no 

longer exists under the PDGM. 

Therefore, many commenters indicated 

the estimated aggregate expenditures 

calculated with simulated 60-day 

episodes (pre PDGM) is inaccurate 

because it does not control for the 

payment incentives which would have 

been present under the old system. 

However, we stated in the CY 2019 HH 

PPS final rule with comment period (83 

FR 56481), that the PDGM is not 

limiting or prohibiting the provision of 

therapy services or the number of home 

health periods of care. In addition, we 

believe that regardless of the case-mix 

system in place, HHAs should continue 

to provide the most appropriate care to 

Medicare home health beneficiaries, in 

accordance with the home health CoP 

requirements at § 484.60. 

While overall utilization may have 

decreased in the early months of CY 

2020 due to the onset of the COVID–19 

PHE, the methodology described in the 

CY 2022 HH PPS proposed rule used the 

same claims dataset (for example, CY 

2020) to compare aggregate 

expenditures under the two payment 

systems. Any effect of the COVID–19 

PHE is included in the estimated 

aggregate expenditures for both 

simulated 60-day episodes and actual 

30-day periods, and therefore this 

methodology ensures that any 

differences between the two calculated 

amounts is not attributable to the 

COVID–19 PHE. In other words, any 

potential changes due to the COVID–19 

PHE (for example, decreased utilization) 

in the 30-day periods would also be 

present in the simulated 60-day 

episodes, making the two datasets 

comparable. 

However, we recognize that the 

COVID–19 PHE presented unique 

challenges for all healthcare settings, 

including HHAs. For example, we 

understand elective procedures were 


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cancelled or postponed and some 

beneficiaries decreased the care in their 

home, including potentially both the 

number of care providers furnishing 

services inside their homes and the 

frequency of services to avoid exposure 

to COVID–19. While we believe the 

proposed methodology presented best 

controls for the effects of the COVID–19 

PHE, we are soliciting comments on 

how the COVID–19 PHE may have 

impacted service provision in a manner 

not reflected in the proposed 

methodology described above. We 

expect that such comments will include 

empirical evidence to support the 

commenter’s position on how the 

COVID–19 PHE affected provider 

behavior. 

Commenters stated that the statute 

requires CMS to analyze solely the 

differences between the three assumed 

behavior changes (clinical group coding, 

comorbidity coding, LUPA threshold) 

that were incorporated into the original 

CY 2020 rate setting and what the actual 

behavior change was for just those three 

assumptions. Commenters stated that 

any adjustments to the 30-day payment 

amount must be related to the impact of 

those three assumed behavior changes 

and the actual behavior changes for 

those same three assumptions on 

estimated aggregate expenditures; rather 

than other behavior changes that 

occurred that impacted aggregate 

expenditures. As such, commenters 

presented an alternative method that 

compares aggregate expenditures 

between the CY 2018 simulated 30-day 

periods with the three behavior 

assumptions applied to the CY 2020 

actual 30-day periods. As we have 

stated previously in the CY 2020 HH 

PPS final rule with comment period and 

in the CY 2022 HH PPS final rule (84 

FR 60513, 86 FR 62248), we interpret 

actual behavior changes to encompass 

both behavior changes that were 

previously outlined, as assumed by 

CMS, and other behavior changes not 

identified at the time that the budget 

neutral 30-day payment amount for CY 

2020 was determined. We use claims 

data to calculate estimated aggregate 

expenditures under the HH PPS, 

regardless of methodology. All claims 

data are products of behavior changes, 

(whether or not acknowledged in 

previous rules), as well as interactions 

between behaviors. Therefore, any 

behavior changes observed under the 

PDGM are considered when 

determining an adjustment. 

A few commenters also proposed 

determining the extent to which 

nominal case-mix changes affected 

aggregate expenditures under the PDGM 

versus the old payment system as an 

alternative methodology to evaluate the 

behavior change assumptions. In order 

to evaluate case-mix changes, CMS 

previously utilized a regression model 

that estimated whether changes in casemix were due to changes in agency 

coding practices or other nominal 

factors, versus real changes in patient 

characteristics or acuity. While changes 

in nominal case-mix may be 

supplemental to our findings, the law 

requires CMS to determine the effect of 

the difference between assumed versus 

actual behavioral changes on estimated 

aggregate expenditures, which are not 

factored into our calculations of casemix adjustment authority. Section 

1895(b)(3)(B)(iv) of the Act states that 

CMS has the authority to adjust for casemix changes that are a result of changes 

in the coding or classification of 

different units of services that do not 

reflect real changes in case mix. 

Therefore, at this time we do not believe 

analyses of nominal case-mix change is 

the most accurate method to evaluate 

what aggregate expenditures would 

have been in absence of the PDGM. 

Upon continued review of what the law 

requires us to do in regards to 

determining the difference between 

assumed versus actual behaviors on 

estimated aggregate expenditures, we 

continue to believe that the best reading 

of the law requires us to retrospectively 

determine if the 30-day payment 

amount in CY 2020 resulted in the same 

estimated aggregate expenditures that 

would have been made if the change in 

the unit of payment and the PDGM casemix adjustment methodology had not 

been implemented. 

Furthermore, if the estimated 

aggregate expenditures are determined 

not to be equal, we are required, by law, 

to make permanent and temporary 

adjustments to the PDGM payment rate 

so that the expenditures across the two 

payments systems would be equal. We 

believe using the methodology 

described previously in the CY 2022 HH 

PPS proposed rule (85 FR 35890 

through 35892 and in this proposed 

rule, best satisfies our interpretation of 

section 1895(b)(3)(D)(i) of the Act. 

Lastly, commenters raised concerns 

about the differing case-mix weight 

systems and that the data exclusions 

and assumptions made when creating 

the simulated 60-day episodes 

introduced some level of bias. 

Commenters stated that each case-mix 

system are unique to each payment 

system as they are dependent on the 

underlying variables used to describe 

clinical characteristics or resource use. 

For this reason, commenters had 

concerns that the two case-mix weight 

systems (153 vs 432 case-mix groups) 

are not comparable. We recognize that 

the underlying variables in the payment 

regression are different, but a case-mix 

of 1.0 is interpreted the same way under 

both systems. For example, a case-mix 

of 1.000 means the predicted resource 

use for a particular home health 60-day 

episode or 30-day period is equal to 

overall average resource use. Therefore, 

we disagree with commenters that 

comparing the two case-mix systems is 

flawed. We note there may be some 

selection bias present due to the data 

exclusions and assumptions described 

in section II.B.2.b. of this proposed rule, 

but we believe this is minimal and does 

not significantly affect the overall 

calculation of estimated aggregate 

expenditures. For example, when we 

dropped fewer claims we got 

approximately the same results. 

Therefore, if we did not exclude claims 

(for example, there was no linked 

OASIS data available in the CCW VRDC) 

or make assumptions about which two 

30-day periods to combine, we would 

further introduce informational and 

analytical bias. 

We reiterate that this methodology 

uses simulated 60-day episodes priced 

using the pre-PDGM payment system 

parameters to determine what the 

estimated aggregate expenditures would 

have been in the absence of the PDGM 

and a 30-day unit of payment. The 

resulting estimated aggregate 

expenditures from the pre-PDGM 

payment system are compared to actual 

aggregate expenditures from the PDGM 

30-day periods to determine, if a 

permanent prospective adjustment and/ 

or a temporary retrospective adjustment 

are needed to offset the difference in 

estimated aggregate expenditures. We 

propose to use this methodology, as 

described in this section of this rule, for 

CYs 2020 through 2026. We refer 

readers to sections II.B.2.d and II.B.2.e 

of this proposed rule for our preliminary 

results of our analysis for CYs 2020 and 

2021, respectively. 

b. Proposed Method To Annually 

Determine the Impact of Differences 

Between Assumed Behavior Changes 

and Actual Behavior Changes on 

Estimated Aggregate Expenditures 

We analyzed data to determine if the 

CY 2020 30-day payment amount 

resulted in the same estimated aggregate 

expenditures that would have been paid 

if the PDGM and change in the unit of 

payment had not been implemented. To 

evaluate if the 30-day budget neutral 

payment amount for CY 2020 

maintained budget neutrality given the 

change to a 30-day unit of payment and 

the implementation of a new case-mix 

adjustment methodology without 


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10There are no 30-day PDGM claims which 

started in CY 2019 and ended in CY 2020, and 

therefore this exclusion would not apply to the CY 

2020 dataset. 

11All of a beneficiary’s claims are dropped so as 

not to create problems with assigning episode 

timing if only a subset of claims is dropped. 

12This is done because if three or more claims 

link to the same OASIS it would not be clear which 

claims should be joined to simulate a 60-day 

episode. 

13https://www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/HomeHealthPPS/ 

CaseMixGrouperSoftware. 

therapy thresholds was accurate, we 

used actual CY 2020 30-day period 

claims data to simulate 60-day episodes, 

and we determined what CY 2020 

payments would have been under the 

153-group case-mix system and 60-day 

unit of payment. To do this, we used the 

following steps: 

The first step in repricing CY 2020 

PDGM claims was to calculate estimated 

aggregate expenditures under the prePDGM, 153-group case-mix system and 

60-day unit of payment, by determining 

which PDGM 30-day periods of care 

could be grouped together to form 

simulated 60-day episodes of care. To 

facilitate grouping, we made some 

exclusions and assumptions as 

described later in this section prior to 

pricing out the simulated 60-day 

episodes of care. We note in the early 

months of CY 2020, there were 60-day 

episodes which started in 2019 and 

ended in 2020 and therefore, some of 

these exclusions and assumptions may 

be specific to the first year of the PDGM. 

We identify, through footnotes, if an 

exclusion or assumption is specific to 

CY 2020 only. The following describes 

the steps in determining the annual 

estimated aggregate expenditures 

including the exclusions and 

assumptions made when simulating 60- 

day episodes from actual 30-day 

periods. 

(1) Exclusions 

• Claims where the claim occurrence 

code 50 date (OASIS assessment date) 

occurred on or after October 31 of that 

year. This exclusion was applied to 

ensure the simulated 60-day episodes 

contained both 30-day periods from the 

same year and would not overlap into 

the following year (for example, 2021, 

2022, 2023). This is done because any 

30-day periods with an OASIS 

assessment date in November or 

December might be part of a simulated 

60-day episode that would continue into 

the following year and where payment 

would have been made based on the 

‘‘through’’ date. For CYs 2021 through 

2026, we also excluded claims with an 

OASIS assessment date before January 1 

of that year. 10 Again, this is to ensure 

a simulated 60-day episode (simulated 

from two 30-day periods) does not 

overlap years. 

• Beneficiaries and all of their claims 

if they have overlapping claims from the 

same provider (as identified by CMS 

Certification Number (CCN)).11

• Beneficiaries and all of their claims 

if three or more claims from the same 

provider are linked to the same 

occurrence code 50 date.12

(2) Assumptions 

• If two 30-day periods of care from 

the same provider reference the same 

OASIS assessment date (using 

occurrence code 50), then we assume 

those two 30-day periods of care would 

have been billed as a 60-day episode of 

care under the 153-group system. 

• If two 30 day-periods of care 

reference different OASIS assessment 

dates and each of those assessment 

dates is referenced by a single 30-day 

period of care, and those two 30-day 

periods of care occur together close in 

time (that is, the ‘‘from’’ date of the later 

30-day period of care is between 0 to 14 

days after the ‘‘through’’ date of the 

earlier 30-day period of care), then we 

assume those two 30-day periods of care 

also would have been billed as a 60-day 

episode of care under the 153-group 

system. 

• For all other 30-day periods of care, 

we assume that they would not be 

combined with another 30-day period of 

care and would have been billed as a 

single 30-day period. 

(3) Calculating Estimated Aggregate 

Expenditures—Pricing Simulated 60- 

Day Episode Claims 

After application of the exclusions 

and assumptions described previously 

we have the simulated the 60-day 

episode datasets for each year. Starting 

with CY 2020, we assign each 60-day 

episode of care as a normal episode, 

PEP, LUPA, or outlier based on the 

payment parameters established in the 

CY 2020 final rule with comment period 

(84 FR 60478) for 60-day episodes of 

care. Next, using the October 2019 3M 

Home Health Grouper (v8219) 13 we 

assign a HIPPS code to each simulated 

60-day episode of care using the 153- 

group methodology. Finally, we price 

the CY 2020 simulated 60-day episodes 

of care using the payment parameters 

described in the CY 2020 final rule with 

comment period (84 FR 60537) for 60- 

day episodes of care. For CYs 2021 

through 2026, we would adjust the 

simulated 60-day base payment rate to 

align with current payments for the 

analysis year (that is, wage index budget 

neutrality factor, HH payment update). 

For example, to calculate the CY 2021 

simulated 60-day episode base payment 

rate, we would start with the final CY 

2020 60-day base payment rate 

($3,220.79) and multiply by the final CY 

2021 wage index budget neutrality 

factor (0.9999) and the CY 2021 HH 

payment update (1.020) to get an 

adjusted 60-day base payment rate 

($3,284.88) for CY 2021. We would use 

the 60-day base payment rate 

($3,284.88) to price the CY 2021 

simulated 60-day claims under the prePDGM HH PPS (60-day episodes under 

153 case-mix groups) based on actual 

behaviors. Once each claim is priced 

under the pre-PDGM HH PPS, we 

calculate the estimated aggregate 

expenditures for all simulated 60-day 

episodes in CY 2021. This method 

would be used to reprice claims to 

simulated 60-day episodes for each 

subsequent year (that is, through CY 

2026). 

Next, we calculated the PDGM 

aggregate expenditures for CY 2020 

using those specific 30-day periods that 

were used to create the simulated 60- 

day episodes. Therefore, both the actual 

CY 2020 PDGM expenditures and the 

simulated pre-PDGM CY 2020 aggregate 

expenditures are based on the same 

claims for the permanent adjustment 

calculation. 

c. Calculating Permanent and 

Temporary Payment Adjustments 

To offset for such increases or 

decreases in estimated aggregate 

expenditures as a result of the impact of 

differences between assumed behavior 

changes and actual behavior changes, in 

any given year, we calculate a 

permanent prospective adjustment by 

determining what the 30 day base 

payment amount should have been in 

order to achieve the same estimated 

aggregate expenditures as obtained from 

the simulated 60-day episodes. This 

would be our recalculated base payment 

rate. The percent change between the 

actual 30-day base payment rate and the 

recalculated 30-day base payment rate 

would be the permanent prospective 

adjustment. 

To calculate a temporary retrospective 

adjustment for each year we would 

determine the dollar amount difference 

between the estimated aggregate 

expenditures from all 30-day periods 

using the recalculated 30-day base 

payment rate, and the aggregate 

expenditures for all 30-day periods 

using the actual 30-day base payment 

rate for the same year. In determining 

the temporary retrospective dollar 


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amount, we use the full dataset of actual 

30-day periods using both the actual 

and recalculated base payment rates to 

ensure utilization and distribution of 

claims are the same. In accordance with 

section 1895(b)(3)(D)(iii) of the Act, the 

temporary adjustment is to be applied 

on a prospective basis and shall apply 

only with respect to the year for which 

such temporary increase or decrease is 

made. Therefore, after we determine the 

dollar amount to be reconciled in any 

given year, we calculate a temporary 

adjustment factor to be applied to the 

base payment rate. The temporary 

adjustment factor is based on an 

estimated number of 30-day periods in 

the next year using historical data 

trends, and as applicable, we control for 

a permanent adjustment factor, case-mix 

weight recalibration neutrality factor, 

wage index budget neutrality factor, and 

the home health payment update. The 

temporary adjustment factor is applied 

last. 

d. CY 2020 Results 

Using the methodology described 

previously, we simulated 60-day 

episodes using actual CY 2020 30-day 

periods to determine what the CY 2020 

permanent and temporary payment 

adjustments should be to offset for such 

increases or decreases in estimated 

aggregate expenditures. For CY 2020, we 

began with 8,423,688 30-day periods 

and dropped 603,157 30-day periods 

that had a claim occurrence code 50 

date after October 31, 2020. We also 

eliminated 79,328 30-day periods that 

didn’t appear to group with another 30- 

day period to form a 60-day episode if 

the 30-day period had a ‘‘from date’’ 

before January 15, 2020 or a ‘‘through 

date’’ after November 30, 2020. This was 

done to ensure a 30-day period would 

not have been part of a 60-day episode 

that would have overlapped into CY 

2021. Applying the additional 

exclusions and assumptions as 

described previously, an additional 

14,062 30-day periods were excluded 

from this analysis. Additionally, we 

excluded 66,469 simulated 60-day 

episodes of care where no OASIS 

information was available in the CCW 

VRDC or could not be grouped to a 

HIPPS due to a missing primary 

diagnosis or other reason. Our simulated 

60-day episodes of care produced a 

distribution of two 30-day periods of 

care (70.6 percent) and single 30-day 

periods of care (29.4 percent). This 

distribution is similar to what we found 

when we simulated 30-day periods of 

care for implementation of the PDGM. 

After all exclusions and assumptions 

were applied, the final dataset included 

7,618,061 actual 30-day periods of care 

and 4,463,549 simulated 60-day 

episodes of care for CY 2020. 

Using the final dataset for CY 2020 

(7,618,061 actual 30-day periods which 

made up the 4,463,549 simulated 60-day 

episodes) we determined the estimated 

aggregate expenditures under the prePDGM HH PPS was lower than the 

actual estimated aggregate expenditures 

under the PDGM HH PPS (see Table 

B13). This indicates that aggregate 

expenditures under the PDGM were 

higher than if the 153-group payment 

system was still in place in CY 2020. As 

described previously, we recalculated 

what the CY 2020 30-day base payment 

rate should have been to equal aggregate 

expenditures that we calculated using 

the simulated CY 2020 60-day episodes. 

The percent change between the two 

payment rates would be the permanent 

adjustment. Next, we calculated the 

difference in aggregate expenditures for 

all CY 2020 PDGM 30-day claims using 

the actual and recalculated payment 

rates. This difference is the retrospective 

dollar amount needed to offset payment. 

Our results are shown in Table B13. 

As shown in Table B13, a permanent 

prospective adjustment of ¥6.52 

percent to the CY 2023 30-day payment 

rate would be required to offset for such 

increases in estimated aggregate 

expenditures in future years. 

Additionally, we determined that our 

initial estimate of base payment rates 

required to achieve budget neutrality 

resulted in excess expenditures of HHAs 

of approximately $873 million in CY 

2020. This would require a temporary 

adjustment to offset for such increase in 

estimated aggregate expenditures for CY 

2020. 

e. CY 2021 Preliminary Results 

We will continue the practice of using 

the most recent complete home health 

claims data at the time of rulemaking. 

The CY 2021 analysis presented in this 

proposed rule is considered preliminary 

and as more data become available from 

the latter half of CY 2021, we will 

update our results in the final rule. 

Using the methodology described 

previously, we simulated 60-day 

episodes using actual CY 2021 30-day 

periods to determine what the 

permanent and temporary payment 

adjustments should be to offset for such 

increases or decreases in estimated 

aggregate expenditures as a result of the 

impact of differences between assumed 

behavior changes and actual behavior 

changes. For CY 2021, we began with 

8,962,690 30-day periods of care and 

dropped 478,105 30-day periods of care 

that had claim occurrence code 50 date 

after October 31, 2021. We also 

excluded 968,361 30-day periods of care 

that had claim occurrence code 50 date 

before January 1, 2021 to ensure the 30- 

day period would not be part of a 

simulated 60-day episode that began in 


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TABLE B13: CY 2020 PROPOSED PERMANENT AND TEMPORARY 

ADJUSTMENTS 

Budget-neutral 30-day Budget-neutral 30-

Payment Rate with day Payment Rate 

Assumed Behavior with Actual 

Chan2es Behavior Chan2es Adiustment 

Permanent 

Base Pavment Rate $1.864.03 $1.742.52 -6.52% 

Temporary 

A2:2:re2ate Expenditures $15,170.223 126 $14.297 150 005 - $873,073 121 

Source: CY 2020 Home Health Claims Data, Periods that begin and end in CY 2020 accessed on the CCW July 12, 

2021. 
Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 37619 

CY 2020. Applying the additional 

exclusions and assumptions as 

described previously, an additional 

4,853 30-day periods were excluded. 

Additionally, we excluded 11,143 

simulated 60-day episodes of care where 

no OASIS information was available in 

the CCW VRDC or could not be grouped 

to a HIPPS due to a missing primary 

diagnosis or other reason. Our simulated 

60-day episodes of care produced a 

distribution of two 30-day periods of 

care (69.1 percent) and single 30-day 

periods of care (30.9 percent) that was 

similar to what we found when we 

simulated two 30-day periods of care for 

implementation of the PDGM. After all 

exclusions and assumptions were 

applied, the final dataset included 

7,494,836 actual 30-day periods of care 

and 4,431,238 simulated 60-day 

episodes of care for CY 2021. 

Using the final dataset for CY 2021 

(7,494,836 actual 30-day periods which 

made up the 4,431,238 simulated 60-day 

episodes) we determined the estimated 

aggregate expenditures under the prePDGM HH PPS was lower than the 

actual estimated aggregate expenditures 

under the PDGM HH PPS. This 

indicates that aggregate expenditures 

under the PDGM were higher than if the 

153-group payment system was still in 

place in CY 2021. As described 

previously, we recalculated what the CY 

2021 30-day base payment rate should 

have been to equal aggregate 

expenditures that we calculated using 

the simulated CY 2021 60-day episodes. 

We note, the actual CY 2021 base 

payment rate of $1,901.12 does not 

account for any adjustments previously 

made for CY 2020 and therefore to 

evaluate changes for only CY 2021 we 

need to control for the ¥6.52 percent 

prospective adjustment that we 

determined for CY 2020. Therefore, 

using the recalculated CY 2020 base 

payment rate of $1,742.52, multiplied 

by the CY 2021 wage index budget 

neutrality factor (0.9999) and the CY 

2021 HH payment update (1.020), the 

CY 2021 base payment rate for assumed 

behavior would have been $1,777.19. 

The percent change between the two 

payment rates would be the permanent 

adjustment. Next, we calculated the 

difference in aggregate expenditures for 

all CY 2021 PDGM 30-day claims using 

the actual and recalculated payment 

rates. This difference is the retrospective 

dollar amount needed to offset payment. 

Our results are shown in Table B14. 

As shown in Table B14, a permanent 

prospective adjustment of ¥1.26 

percent and would be required to offset 

for such increases in estimated aggregate 

expenditures in future years. 

Additionally, we determined that our 

initial estimate of base payment rates 

required to achieve budget neutrality 

resulted in excess expenditures of 

approximately $1.1 billion in CY 2021. 

This would require a one-time 

temporary adjustment factor to offset for 

such increases in estimated aggregate 

expenditures for CY 2021. 

f. Proposed CY 2023 Permanent and 

Temporary Adjustments 

The percent change between the 

actual CY 2021 base payment rate of 

$1,901.12 and the CY 2021 recalculated 

base payment rate of $1,754.88 is the 

total permanent adjustment for CYs 

2020 and 2021, because no previous 

adjustments were applied to the CY 

2020 rate to reset the CY 2021 rate. The 

summation of the dollar amount for CYs 

2020 and 2021 is the amount that 

represents the temporary payment 

adjustment to offset for increased 

aggregate expenditures in both CYs 2020 

and 2021. Our results are shown in 

Table B15 and B16. 


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TABLE B14: CY 2021 PROPOSED PERMANENT AND TEMPORARY 

ADJUSTMENTS 

Base Payment Rate 

Aggregate Expenditures 

Budget-neutral 30-

day Payment Rate 

with Assumed 

Budget-neutral 30-

day Payment Rate 

with Actual 

Behavior Changes Behavior Changes 

$1,777.19 $1,754.88 

$16,491, 173,256* $15,343,249,798 

Adjustment 

Permanent 

-1.26% 

Temporary 

-$1,147,923,458 

Source: CY 2021 Home Health Claims Data, Periods that end in CY 2021 accessed on the CCW March 21, 2022 

*Note: The estimated aggregate expenditures for assumed behavior ($16.5 billion), uses the CY 2021 payment rate 

of$1,901.12 as this is what CMS actually paid in CY 2021. 
37620 Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 

14https://www.federalregister.gov/documents/ 

2009/01/16/E9-743/hipaa-administrativesimplification-modifications-to-medical-data-codeset-standards-to-adopt. 

To offset the increase in estimated 

aggregate expenditures for CYs 2020 and 

2021 based on the impact of the 

differences between assumed and actual 

behavior changes, CMS would need to 

apply a ¥7.69 percent permanent 

adjustment to the CY 2023 base 

payment rate as well as implement a 

temporary adjustment of approximately 

$2.0 billion to reconcile retrospective 

overpayments in CYs 2020 and 2021. 

We recognize that applying the full 

permanent and temporary adjustment 

immediately would result in a 

significant negative adjustment in a 

single year. However, if the PDGM base 

30-day payment rate remains higher 

than it should be, then there would 

likely be a compounding effect 

potentially creating the need for a larger 

reduction in future years. Therefore, we 

propose initially to apply only the 

permanent adjustment of ¥7.69 percent 

to the CY 2023 base payment rate. We 

believe this could mitigate the need for 

a larger permanent adjustment and 

could reduce the amount of any 

additional temporary adjustments in 

future years. We are soliciting 

comments on the application of only the 

permanent payment adjustment to the 

CY 2023 30-day payment rate. 

Additionally, we solicit comments on 

how best to collect the temporary 

payment adjustment of approximately 

$2.0 billion for CYs 2020 and 2021. As 

noted previously, we will update these 

permanent and temporary adjustments 

in the final rule to reflect more complete 

claims data for CY 2021. 

3. Proposed Reassignment of Specific 

ICD–10–CM Codes Under the PDGM 

a. Background 

The 2009 final rule, ‘‘HIPAA 

Administrative Simplification: 

Modifications to Medical Data Code Set 

Standards To Adopt ICD–10–CM and 

ICD–10–PCS’’ 14 (74 FR 3328, January 

16, 2009), set October 1, 2013, as the 

compliance date for all covered entities 

under the Health Insurance Portability 

and Accountability Act of 1996 (HIPAA) 

to use the International Classification of 

Diseases, 10th Revision, Clinical 

Modification (ICD–10–CM) and the 

International Classification of Diseases, 

10th Revision, Procedure Coding 

System (ICD–10–PCS) medical data 

code sets. The ICD–10–CM diagnosis 

codes are granular and specific, and 

provide HHAs a better opportunity to 

report codes that best reflect the 

patient’s conditions that support the 

need for home health services. However, 

as stated in the CY 2019 HH PPS final 

rule with comment period (83 FR 

56473), because the ICD–10–CM is 

comprehensive, it also contains many 

codes that may not support the need for 

home health services. For example, 

diagnosis codes that indicate death as 

the outcome are Medicare covered 

codes, but are not relevant to home 

health. In addition, diagnosis and 

procedure coding guidelines may 

specify the sequence of ICD–10–CM 

coding conventions. For example, the 

underlying condition must be listed first 

(for example, Parkinson’s disease must 

be listed prior to Dementia if both codes 

were listed on a claim). Therefore, not 

all the ICD–10–CM diagnosis codes are 

appropriate as principal diagnosis codes 

for grouping home health periods into 

clinical groups or to be placed into a 

comorbidity subgroup when listed as a 

secondary diagnosis. As such, each 

ICD–10–CM diagnosis code is assigned, 

including those diagnosis codes 

designated as ‘‘not assigned’’ (NA), to a 

clinical group and comorbidity 

subgroup within the HH PPS grouper 

software (HHGS). We remind 

commenters the ICD–10–CM diagnosis 

code list is updated each fiscal year 

with an effective date of October 1st and 

therefore, the HH PPS is generally 

subject to a minimum of two HHGS 

releases, one in October and one in 

January of each year, to ensure that 

claims are submitted with the most 

current code set available. Likewise, 

there may be new ICD–10–CM diagnosis 

codes created (for example, codes for 

emergency use) or a new or revised edit 

in the Medicare Code Editor (MCE) so 

an update to the HHGS may occur on 

the first of each quarter (January, April, 

July, October). 

b. Methodology for ICD–10–CM 

Diagnosis Code Assignments 

Although it is not our intent to review 

all ICD–10–CM diagnosis codes each 

year, we recognize that occasionally 

some ICD–10–CM diagnosis codes may 

require changes to their assigned 

clinical group and/or comorbidity 

subgroup. For example, there may be an 

update to the MCE unacceptable 

principal diagnosis list, or we receive 

public comments from interested parties 

requesting specific changes. Any 

addition or removal of a specific 

diagnosis code to the ICD–10–CM code 

set (for example, three new diagnosis 

codes, Z28.310, Z28.311 and Z28.39, for 


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TABLE B15: TOTAL PERMANENT ADJUSTMENT FOR CYs 2020 AND 2021 

Actual CY 2021 Base Recalculated CY 2021 Base Total Permanent 

Payment Rate Payment Rate Prospective Adjustment 

(Assumed Behavior) (Actual Behavior) 

$1,901.12 $1,754.88 -7.69% 

Source: CY 2021 Home Health Claims Data, Periods that end in CY 2021 accessed on the CCW March 21, 2022. 

TABLE B16: TOTAL TEMPORARY ADJUSTMENT FOR CYs 2020 AND 2021 

CY 2020 Temporary CY 2021 Temporary Total Temporary 

Adjustment Adjustment Adjustment Dollar Amount 

for CYs 2020 and 2021 

- $873 073 121 - $1 147 923 458 - $2,020 996 579 

Source: CY 2020 Home Health Claims Data, Periods that begin and end in CY 2020 accessed on the CCW July 12, 

2021. CY 2021 Home Health Claims Data, Periods that end in CY 2021 accessed on the CCW March 21, 2022. 
Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 37621 

15Home Health Prospective Payment System 

Regulations and Notices web page. https://

www.cms.gov/Medicare/Medicare-Fee-for-ServicePayment/HomeHealthPPS/Home-HealthProspective-Payment-System-Regulations-andNotices. 

reporting COVID–19 vaccination status 

were effective April 1, 2022) or minor 

tweaks to a descriptor of an existing 

ICD–10–CM diagnosis code generally 

would not require rulemaking, and may 

occur at any time. However, if an ICD– 

10–CM diagnosis code is to be 

reassigned from one clinical group and/ 

or a comorbidity subgroup to another, 

which may affect payment, then we 

believe it is appropriate to propose these 

changes through notice and comment 

rulemaking. 

We rely on the expert opinion of our 

clinical reviewers (for example, nurse 

consultants and medical officers) and 

current ICD–10–CM coding guidelines 

to determine if the ICD–10–CM 

diagnosis codes under review for 

reassignment are significantly similar or 

different to the existing clinical group 

and/or comorbidity subgroup 

assignment. As we stated in the CY 2018 

proposed rule (82 FR 35313), the intent 

of the clinical groups is to reflect the 

reported principal diagnosis, clinical 

relevance, and coding guidelines and 

conventions. Therefore, for the purposes 

of assignment of ICD–10–CM diagnosis 

codes into the PDGM clinical groups we 

would not conduct additional statistical 

analysis as such decisions are clinically 

based and the clinical groups are part of 

the overall case-mix weights. 

In the CY 2019 final rule with 

comment period (83 FR 56486), we 

stated the home health-specific 

comorbidity list is 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 meaning the diagnoses 

have at least as high as the median 

resource use and are reported in more 

than 0.1 percent of 30-day periods of 

care. If specific ICD–10–CM diagnosis 

codes are to be reassigned to a different 

comorbidity subgroup (including NA), 

we will first evaluate the clinical 

characteristics (as discussed previously 

for clinical groups) and if the ICD–10– 

CM diagnosis code does not meet the 

clinical criteria, then no reassignment 

will occur. However, if an ICD–10–CM 

diagnosis code does meet the clinical 

criteria for a comorbidity subgroup 

reassignment, then we will evaluate the 

resource consumption associated with 

the ICD–10–CM diagnosis codes, the 

current assigned comorbidity subgroup, 

and the proposed (reassigned) 

comorbidity subgroup. This analysis is 

to ensure that any reassignment of an 

ICD–10–CM diagnosis code (if reported 

as secondary) in any given year would 

not significantly alter the overall 

resource use of a specific comorbidity 

subgroup. For resource consumption, 

we use non-LUPA 30-day periods to 

evaluate the total number of 30-day 

periods for the comorbidity subgroup(s) 

and the ICD–10–CM diagnosis code, the 

average number of visits per 30-day 

periods for the comorbidity subgroup(s) 

and the ICD–10–CM diagnosis code, and 

the average resource use for the 

comorbidity subgroup(s) and the ICD– 

10–CM diagnosis code. The average 

resource use measures the costs 

associated with visits performed during 

a home health period, and was 

previously described in the CY 2019 

final rule with comment period (83 FR 

56450). 

c. Proposed ICD–10–CM Diagnosis Code 

Reassignments to a PDGM Clinical 

Group or Comorbidity Subgroup 

The following section proposes 

reassignment of 320 diagnosis codes to 

a different clinical group when listed as 

a principal diagnosis, reassignment of 

37 diagnosis codes to a different 

comorbidity subgroup when listed as a 

secondary diagnosis, and the 

establishment of a new comorbidity 

subgroup for certain neurological 

conditions and disorders. Due to the 

amount of diagnosis codes proposed for 

reassignment this year, we have posted 

the ‘‘CY 2023 Proposed Reassignment of 

ICD–10–CM Diagnosis Codes for HH 

PDGM Clinical Groups and Comorbidity 

Subgroups’’ supplemental file on the 

Home Health Prospective Payment 

System Regulations and Notices web 

page.15 The supplemental file can be 

accessed through the CY 2023 Home 

Health Prospective Payment System 

Rate Update; Home Health Quality 

Reporting Requirements; and Home 

Infusion Therapy Requirements link. 

The following tables are included in the 

supplemental file: 

(1) Proposed Clinical Group 

Reassignment of Certain Unspecified 

Diagnosis Codes 

We remind readers that in the CY 

2019 final rule with comment period (83 

FR 56473) we stated that whenever 

possible, the most specific code that 

describes a medical disease, condition, 

or injury should be used. Generally, 

‘‘unspecified’’ codes are used when 

there is lack of information about 

location or severity of medical 

conditions in the medical record. 

However, we would expect a provider to 

use a precise code whenever more 

specific codes are available. 

Furthermore, if additional information 

regarding the diagnosis is needed, we 

would expect the HHA to follow-up 

with the referring provider in order to 

ensure the care plan is sufficient in 


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Tables (Tab) Description 

TABLE I.A - Unspecified Diagnosis Codes List of unspecified diagnosis codes proposed 

to be reassigned to no clinical group "NA" 

TABLE 1.B - Gout Related Diagnosis Codes List of gout related diagnosis codes proposed 

to be reassigned from no clinical group, 

"NA", to clinical group E, musculoskeletal 

rehabilitation 

TABLE 1.C - G Diagnosis Codes Related to List of G codes related to specified 

Specified Neuropathy or Unspecified neuropathy or unspecified polyneuropathy 

Neuropathy proposed to be reassigned to new comorbidity 

subgroup, neurological 12 
37622 Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 

16Home Health Prospective Payment System 

Regulations and Notices web page. https://

www.cms.gov/Medicare/Medicare-Fee-for-ServicePayment/HomeHealthPPS/Home-HealthProspective-Payment-System-Regulations-andNotices. 

meeting the needs of the patient. For 

example, T14.90 ‘‘Injury, unspecified’’ 

does not provide sufficient information 

(for example, the type and extent of the 

injury) that would be necessary in care 

planning for home health services. The 

ICD–10–CM code set also includes 

laterality. We believe a home health 

clinician should not report an 

‘‘unspecified’’ code if that clinician can 

identify the side or site of a condition. 

For example, a home health clinician 

should be able to state whether a 

fracture of the arm is on the right or left 

arm. In the FY 2022 Inpatient 

Prospective Payment System/Long-Term 

Care Hospital Prospective Payment 

System (IPPS/LTCH PPS) final rule (86 

FR 44940 through 44943), CMS 

finalized the implementation of a new 

MCE to expand the list of unacceptable 

principal diagnoses for ‘‘unspecified’’ 

ICD–10–CM diagnosis codes when there 

are other diagnosis codes available in 

that diagnosis code subcategory that 

further specify the anatomic site. As 

such, we reviewed the ICD–10–CM 

diagnosis codes where ‘‘unspecified’’ is 

used. We identified 159 ICD–10–CM 

diagnosis codes currently accepted as a 

principal diagnosis that have more 

specific codes available for such 

medical conditions that would more 

accurately identify the primary reason 

for home health services. For example, 

S59.109A (Unspecified physeal fracture 

of upper end of radius, unspecified arm, 

initial encounter for closed fracture) 

does not specify which arm has the 

fracture; whereas, S59.101A 

(Unspecified physeal fracture of upper 

end of radius, right arm, initial 

encounter for closed fracture) does 

indicate the fracture is on the right arm 

and therefore more accurately identifies 

the primary reason for home health 

services. Therefore, in accordance with 

our expectation that the most precise 

code be used, we believe these 159 ICD– 

10 CM diagnosis codes are not 

acceptable as principal diagnoses and 

we propose to reassign them to ‘‘no 

clinical group’’ (NA). We refer readers to 

Table 1.A of the CY 2023 Proposed 

Reassignment of ICD–10–CM Diagnosis 

Codes supplemental file 16 for the list of 

the 159 unspecified diagnosis codes. 

We also determined that B78.9 

strongyloidiasis, unspecified was 

assigned to clinical group C (Wounds), 

and should be reassigned to clinical 

group K (MMTA—Infectious Disease, 

Neoplasms, and Blood-Forming 

Diseases) because it would be consistent 

with the assignment of the other 

strongyloidiasis codes. We also 

identified that N83.201 unspecified 

ovarian cyst, right side was assigned to 

clinical group A (MMTA-Other) and 

should be reassigned to clinical group J 

(MMTA—Gastrointestinal Tract and 

Genitourinary System) because it would 

be consistent with the assignment of 

other ovarian cyst codes. We propose to 

reassign these two ICD–10–CM 

diagnosis codes’ clinical groups as 

shown in Table B17. 

(2) Proposed Clinical Group 

Reassignment of Gout-Related Codes 

We identified that certain groups of 

gout-related ICD–10–CM diagnosis 

codes, such as idiopathic gout and druginduced gout, were assigned to clinical 

group E (musculoskeletal rehabilitation) 

when listed as a principal diagnosis. 

However, other groups of gout related 

ICD–10–CM diagnosis codes, such as 

gout due to renal impairment, were 

assigned to ‘‘no clinical group’’ (NA). 

Therefore, we reviewed all gout-related 

codes and determined there are 144 gout 

related codes with an anatomical site 

specified, not currently assigned to a 

clinical group that should be moved to 

clinical group E (musculoskeletal 

rehabilitation) for consistency with the 

aforementioned gout codes. In the ICD– 

10–CM code set, gout codes and 

osteoarthritis codes are found in chapter 

13 Diseases of the Musculoskeletal 

System and Connective Tissue (M00– 

M99). Gout and osteoarthritis affect 

similar joints such as the fingers, toes, 

and knees and they can initially be 

treated with medications. However, 

generally, as a part of a treatment 

program, once the initial inflammation 

is reduced, physical therapy can be 

started to stretch and strengthen the 

affected joint to restore flexibility and 

joint function. Because those cases may 

require therapy, we believe gout codes 

are more appropriately placed into MS 

rehab along with other codes affecting 

the musculoskeletal system. We refer 

readers to Table 1.B of the CY 2023 

Proposed Reassignment of ICD–10–CM 

Diagnosis Codes supplemental file for 

the list of the 144 gout related codes. We 

propose to reassign these 144 goutrelated ICD–10–CM diagnosis codes to 

clinical group E (musculoskeletal 

rehabilitation). 

(3) Proposed Clinical Group 

Reassignment of Crushing InjuryRelated Codes 

We identified 12 ICD–10–CM 

diagnosis codes related to crushing 

injury of the face, skull, and head that 

warrant reassignment. These codes are 

listed in Table B18. 


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TABLE Bl 7: REASSIGNMENT OF CLINICAL GROUP FOR "UNSPECIFIED" ICD10-CM DIAGNOSIS CODES 

ICD-10-CM 

Code 

B78.9 

N83.201 

Code Description 

Strongy loidiasis, unspecified 

Unspecified ovarian cyst, right side 

Reassigned 

Clinical Group Reassigned Clinical Group Description 

K MMT A - Infectious Disease, Neoplasms, 

and Blood-Forming Diseases 

J MMT A - Gastrointestinal Tract and 

Genitourinary System 
Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 37623 

Our clinical advisors reviewed the 12 

ICD–10–CM diagnosis codes related to 

crushing injury of the face, skull, and 

head and determined that reassignment 

of these codes to clinical group B 

(Neurological Rehabilitation) is 

clinically appropriate because they are 

consistent with other diagnosis codes in 

clinical group E that describe injuries 

requiring neurological rehabilitation. 

Therefore, we propose to reassign the 

ICD–10–CM diagnosis codes listed in 

Table B18 from clinical group A 

(MMTA-Other) to clinical group B 

(Neurological Rehabilitation). 

(4) Proposed Clinical Group 

Reassignment of Lymphedema-Related 

Codes 

We received questions from interested 

parties regarding three lymphedema 

codes with conflicting clinical group 

assignments when listed as a principal 

diagnosis. These codes are listed in 

Table B19. 

Our clinical advisors reviewed the 

three ICD–10–CM diagnosis codes 

related to lymphedema and determined 

that assessing and treating lymphedema 

is similar to the assessment and staging 

of wounds. It requires the assessment of 

pulses, evaluation of the color and 

amount of drainage, and measurement. 

In addition, some lymphedema can 

require compression bandaging, similar 

to wound care. Because of these 

similarities, we determined the 

reassignment of the three ICD–10–CM 

diagnosis codes related to lymphedema 

to clinical group C (Wounds) is 

clinically appropriate. Therefore, we 

propose to reassign the ICD–10–CM 

diagnosis codes listed in Table B19 from 

clinical group E (Musculoskeletal 

Rehabilitation) and clinical group A 

(MMTA-Other) to clinical group C 

(Wounds). 

(5) Proposed Behavioral Health 

Comorbidity Subgroups 

Our clinical advisors reviewed the 

ICD–10–CM diagnosis code F60.5 


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TABLE B18: ICD-10-CM DIAGNOSIS CODES RELATED TO CRUSHING INJURY 

OF FACE, SKULL, AND HEAD 

Current 

ICD-10-CM Clinical Current Clinical 

Code Code Description Group Group Description 

S07.0XXA Crushing injmy of face, initial encounter A MMTA-Other 

S07.0XXD Crushing injmy of face, subsequent encounter A MMTA-Other 

S07.0XXS Crushing injmy of face, sequela A MMTA-Other 

S07.lXXA Crushing injmy of skull, initial encounter A MMTA-Other 

S07.lXXD Crushing injmy of skull, subsequent encounter A MMTA-Other 

S07.lXXS Crushing injmy of skull, sequela A MMTA-Other 

S07.8XXA Crushing injmy of other parts of head, initial encounter A MMTA-Other 

S07.8XXD Crushing injmy of other parts of head, subsequent encounter A MMTA-Other 

S07.8XXS Crushing injmy of other parts of head, sequela A MMTA-Other 

S07.9XXA Crushing injmy of head, part unspecified, initial encounter A MMTA-Other 

S07.9XXD Crushing injmy of head, part unspecified, subsequent encounter A MMTA-Other 

S07.9XXS Crushing injmy of head, part unspecified, sequela A MMTA-Other 

TABLE B19: ICD-10-CM DIAGNOSIS CODE RELATED TO LYMPHEDEMA 

ICD-lOCM 

Diagnosis Current Current Clinical Group 

Code Code Description Clinical Group Description 

189.0 Lymphedema, not elsewhere classified E Musculoskeletal Rehabilitation 

197.2 Postmastectomy lymphedema syndrome E Musculoskeletal Rehabilitation 

Q82.0 Hereditary lymphedema A MMTA-Other 
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(obsessive-compulsive personality 

disorder) which is currently assigned to 

the comorbidity subgroup behavioral 6 

(Schizotypal, Persistent Mood, and 

Adult Personality Disorders). However, 

they noted that behavioral 5 (Phobias, 

Other Anxiety and ObsessiveCompulsive Disorders) contains other 

obsessive-compulsive disorders (for 

example, F42.8 and F42.9) and 

clinically F60.5 should be reassigned to 

the comorbidity subgroup behavioral 5. 

In addition, we evaluated resource 

consumption related to the comorbidity 

subgroup behavioral 5, the comorbidity 

subgroup behavioral 6, and F60.5 and 

found no significant variations negating 

a reassignment, meaning the 

reassignment is still in alignment with 

the actual costs of providing care. 

Therefore, we propose to reassign 

diagnosis code F60.5 to behavioral 5 

when listed as a secondary diagnosis. 

(6) Proposed Circulatory Comorbidity 

Subgroups 

We reviewed Q82.0 (hereditary 

lymphedema) for clinical group 

reassignment, as described in section 

II.B.3.4. of this rule. During this review, 

we discovered Q82.0 is not currently 

assigned to a comorbidity subgroup 

when listed as a secondary diagnosis. 

The comorbidity subgroup circulatory 

10 includes ICD–10–CM diagnosis codes 

related to varicose veins and 

lymphedema and our clinical advisors 

determined that Q82.0 should be 

assigned to the comorbidity subgroup 

circulatory 10 similar to other 

lymphedema diagnosis codes. In 

addition, we evaluated resource 

consumption related to the comorbidity 

subgroup circulatory 10 and Q82.0 and 

found no significant variations negating 

a reassignment. Therefore, we propose 

to assign diagnosis code Q82.0 to 

circulatory 10 (varicose veins and 

lymphedema) when listed as a 

secondary diagnosis. 

(7) Proposed Neoplasm Comorbidity 

Subgroups 

(i) Malignant Neoplasm of Upper 

Respiratory 

In response to interested parties’ 

questions regarding upper respiratory 

malignant neoplasms, we reviewed 14 

ICD–10–CM diagnosis codes related to 

malignant neoplasms of the upper 

respiratory tract currently assigned to 

the comorbidity subgroup neoplasm 6 

(malignant neoplasms of trachea, 

bronchus, lung, and mediastinum). 

These 14 codes are listed in Table B20. 

Our clinical advisors reviewed the 

codes listed in Table B20 and 

determined that C32.3, C32.8, and C32.9 

are currently assigned to the most 

clinically appropriate neoplasm 

comorbidity subgroup (neoplasm 6), and 

therefore no further analysis was 

conducted for these three ICD–10 CM 

diagnosis codes. However, upon review 

of all the neoplasm comorbidity 

subgroups, they determined that the 

remaining 11 codes listed in Table B20 

should be reassigned to neoplasm 1 

(malignant neoplasms of lip, oral cavity, 

and pharynx, including head and neck 


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TABLE B20: ICD-10-CM DIAGNOSIS CODE RELATED TO MALIGNANT 

NEOPLASMS OF UPPER RESPIRATORY TRACT 

ICD-10-CM Diagnosis Code 

C30.0 

C30.l 

C31.0 

C31.l 

C31.2 

C31.3 

C31.8 

C31.9 

C32.0 

C32.l 

C32.2 

C32.3 

C32.8 

C32.9 

Code Description 

Malignant neoplasm of nasal cavity 

Malignant neoplasm of middle ear 

Malignant neoplasm of maxillary sinus 

Malignant neoplasm of ethmoidal sinus 

Malignant neoplasm of frontal sinus 

Malignant neoplasm of sphenoid sinus 

Malignant neoplasm of overlapping sites of accessory sinuses 

Malignant neoplasm of accessory sinus, unspecified 

Malignant neoplasm of glottis 

Malignant neoplasm of supraglottis 

Malignant neoplasm of sub glottis 

Malignant neoplasm of laryngeal cartilage 

Malignant neoplasm of overlapping sites of larynx 

Malignant neoplasm of larynx, unspecified 
Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 37625 

cancers) in alignment with clinically 

similar diagnosis codes already assigned 

(for example, C11.0 malignant neoplasm 

of superior wall of nasopharynx). In 

addition, we evaluated resource 

consumption related to the comorbidity 

subgroup, neoplasm 1, as well as 

diagnosis codes, C30.0, C30.1, C31.0, 

C31.1, C31.2, C31.3, C31.8, C31.9, 

C32.0, C32.1, or C32.2 and found no 

significant variations negating a 

reassignment. 

Therefore, we propose to reassign 

diagnosis codes C30.0, C30.1, C31.0, 

C31.1, C31.2, C31.3, C31.8, C31.9, 

C32.0, C32.1, or C32.2 from neoplasm 6 

to neoplasm 1 when listed as a 

secondary diagnosis. 

(ii) Malignant Neoplasm of Unspecified 

Adrenal Gland 

While reviewing unspecified codes 

for a change in clinical group, we 

noticed that ICD–10–CM diagnosis 

codes C74.00 (malignant neoplasm of 

cortex of unspecified adrenal gland) and 

C74.90 (malignant neoplasm of 

unspecified part of unspecified adrenal 

gland) were coded as ‘‘N/A’’ instead of 

placed in a comorbidity subgroup. The 

comorbidity subgroup neoplasm 15 

currently includes ICD–10–CM 

diagnosis codes related to malignant 

neoplasm of adrenal gland, endocrine 

glands and related structures; 

specifically, C74.10 (malignant 

neoplasm of medulla of unspecified 

adrenal gland). At this time, we believe 

that C74.00 and C74.90 should be 

reassigned to neoplasm 15 based on 

clinical similarities of other codes 

currently assigned. In addition, we 

evaluated resource consumption related 

to the comorbidity subgroup neoplasm 

15, as well as diagnosis codes C74.00, 

and C74.90 and found no significant 

variations negating a reassignment. 

Therefore, we propose to reassign 

diagnosis codes C74.00 and C74.90 from 

‘‘NA’’ to neoplasm 15 (malignant 

neoplasm of adrenal gland, endocrine 

glands and related structures) when 

listed as secondary diagnoses. 

(8) Proposed New Neurological 

Comorbidity Subgroup 

In response to a comment received, 

we discussed in the CY 2022 final rule 

(86 FR 62263, 62264) our review of ICD– 

10–CM diagnosis codes related to 

specified neuropathy or unspecified 

polyneuropathy. These include specific 

ICD–10–CM G-codes. We stated that the 

codes were assigned to the most 

clinically appropriate subgroup at the 

time. However, upon further clinical 

review we believe a new neurological 

comorbidity subgroup to include ICD– 

10–CM diagnosis codes related to 

nondiabetic neuropathy is warranted. 

We identified 18 ICD–10–CM diagnosis 

codes for potential reassignment to a 

proposed new comorbidity subgroup, 

neurological 12. We refer readers to 

Table 1.C of the CY 2023 Proposed 

Reassignment of ICD–10–CM Diagnosis 

Codes supplemental file for a list of the 

G-codes related to specified neuropathy 

or unspecified polyneuropathy. Of the 

18 codes, 11 diagnosis codes were not 

currently assigned a comorbidity group 

and seven diagnosis codes were 

assigned to neurological 11 comorbidity 

subgroup. 

Using claims data from the CY 2021 

HH PPS analytical file, we identified 

that the 18 diagnosis G-codes related to 

specified neuropathy or unspecified 

polyneuropathy would have sufficient 

claims (>400,000) for a new comorbidity 

subgroup. The removal of the seven 

codes from the neurological 11 

comorbidity subgroup, would still allow 

for sufficient claims (>250,000) and 

include the remaining 146 diagnosis 

codes currently listed in the 

neurological 11 comorbidity subgroup. 

We evaluated resource consumption 

related to the comorbidity subgroup 

neurological 11, the 18 diagnosis Gcodes, and the proposed comorbidity 

subgroup neurological 12 and found no 

significant variations negating a 

reassignment. A new neurological 

comorbidity subgroup allows more 

clinically similar codes, nondiabetic 

neuropathy, to be grouped together. 

Therefore, we propose to reassign the 18 

diagnosis codes listed in Table 1.C of 

the CY 2023 Proposed Reassignment of 

ICD–10 CM Diagnosis Codes 

supplemental file, to the new 

comorbidity subgroup neurological 12 

(nondiabetic neuropathy) when listed as 

secondary diagnoses. In conjunction 

with the proposed new comorbidity 

subgroup, we propose to change the 

description of the current comorbidity 

subgroup, neurological 11, from 

‘‘Diabetic Retinopathy and Macular 

Edema’’ to ‘‘Disease of the Macula and 

Blindness/Low Vision’’. 

(9) Proposed Respiratory Comorbidity 

Subgroups 

(i) J18.2 Hypostatic Pneumonia, 

Unspecified Organism 

Our clinical advisors reviewed the 

ICD–10–CM diagnosis code J18.2 

(hypostatic pneumonia, unspecified 

organism) which is currently assigned to 

the comorbidity subgroup respiratory 4 

(bronchitis, emphysema, and interstitial 

lung disease). However, respiratory 2 

(whooping cough and pneumonia) 

contains other pneumonia with 

unspecified organism (for example, 

J18.1 and J18.8). Clinically, J18.2 is 

similar to the other pneumonias in 

respiratory 2 and therefore, should be 

reassigned from comorbidity subgroup 

respiratory 4 to comorbidity subgroup 

respiratory 2. In addition, we evaluated 

resource consumption related to the 

comorbidity subgroups respiratory 2 

and respiratory 4, and J18.2 and found 

no significant variations negating a 

reassignment. 

Therefore, we propose to reassign 

diagnosis code J18.2 (hypostatic 

pneumonia, unspecified organism) to 

respiratory 2 when listed as a secondary 

diagnosis. 

(ii) J98.2 Interstitial Emphysema and 

J98.3 Compensatory Emphysema 

Our clinical advisors reviewed the 

ICD–10–CM diagnosis codes J98.2, 

interstitial emphysema and J98.3, 

compensatory emphysema, which are 

currently assigned to the comorbidity 

subgroup respiratory 9 (respiratory 

failure and atelectasis). However, 

respiratory 4 (bronchitis, emphysema, 

and interstitial lung disease) contains 

other emphysema codes (for example, 

J43.0 through J43.9) and therefore 

clinically we believe it is appropriate to 

reassign J98.2 and J98.3 to the 

comorbidity subgroup respiratory 9. In 

addition, we evaluated resource 

consumption related to the comorbidity 

subgroups respiratory 4 and respiratory 

9, as well as diagnosis codes J98.2, and 

J98.3 and found no significant variations 

negating a reassignment. Therefore, we 

propose to reassign diagnosis codes 

J98.2 and J98.3 to respiratory 4 when 

listed as a secondary diagnosis. 

(iii) U09.9 Post COVID–19 Condition, 

Unspecified 

Our clinical advisors reviewed the 

ICD–10–CM diagnosis code U09.9 (post 

COVID–19 condition, unspecified), 

which is currently assigned to the 

comorbidity subgroup, respiratory 2 

(whooping cough and pneumonia). 

However, respiratory 10 (2019 novel 

Coronavirus) contains other COVID–19 

codes (for example, U07.1). Therefore, 

we believe clinically that U09.9 should 

be reassigned to the comorbidity 

subgroup, respiratory 10. In addition, 

we evaluated resource consumption 

related to the comorbidity subgroups 

respiratory 2 and respiratory 10, and 

diagnosis codes U09.9 and found no 

significant variations negating a 

reassignment. 

Therefore, we propose to reassign 

diagnosis code U09.9 to respiratory 10 

when listed as a secondary diagnosis. 

We solicit comments on all of the 

proposed clinical group and 


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comorbidity subgroup reassignments 

described in this section. 

4. Proposed CY 2023 PDGM LUPA 

Thresholds and PDGM Case-Mix 

Weights 

a. Proposed CY 2023 PDGM LUPA 

Thresholds 

Under the HH PPS, LUPAs are paid 

when a certain visit threshold for a 

payment group during a 30-day period 

of care is not met. In the CY 2019 HH 

PPS final rule (83 FR 56492), we 

finalized that the LUPA thresholds 

would be set at the 10th percentile of 

visits or 2 visits, whichever is higher, 

for each payment group. This means the 

LUPA threshold for each 30 day period 

of care varies depending on the PDGM 

payment group to which it is assigned. 

If the LUPA threshold for the payment 

group is met under the PDGM, the 30- 

day period of care will be paid the full 

30-day period case-mix adjusted 

payment amount (subject to any PEP or 

outlier adjustments). If a 30-day period 

of care does not meet the PDGM LUPA 

visit threshold, then payment will be 

made using the CY 2023 per-visit 

payment amounts as described in 

Section II.B.5.c. of this proposed rule. 

For example, if the LUPA visit threshold 

is four, and a 30-day period of care has 

four or more visits, it is paid the full 30- 

day period payment amount; if the 

period of care has three or less visits, 

payment is made using the per-visit 

payment amounts. 

In the CY 2019 HH PPS final rule with 

comment period (83 FR 56492), we 

finalized our policy that the LUPA 

thresholds for each PDGM payment 

group would be reevaluated every year 

based on the most current utilization 

data available at the time of rulemaking. 

However, as CY 2020 was the first year 

of the new case-mix adjustment 

methodology, we stated in the CY 2021 

final rule (85 FR 70305, 70306) that we 

would maintain the LUPA thresholds 

that were finalized and shown in Table 

17 of the CY 2020 HH PPS final rule 

with comment period (84 FR 60522) for 

CY 2021 payment purposes. We stated 

that at that time, we did not have 

sufficient CY 2020 data to reevaluate the 

LUPA thresholds for CY 2021. 

In the CY 2022 HH PPS final rule (86 

FR 62249), we finalized the proposal to 

recalibrate the PDGM case-mix weights, 

functional impairment levels, and 

comorbidity subgroups while 

maintaining the LUPA thresholds for CY 

2022. We stated that because there are 

several factors that contribute to how 

the case-mix weight is set for a 

particular case-mix group (such as the 

number of visits, length of visits, types 

of disciplines providing visits, and nonroutine supplies) and the case-mix 

weight is derived by comparing the 

average resource use for the case-mix 

group relative to the average resource 

use across all groups, we believe the 

PHE would have impacted utilization 

within all case-mix groups similarly. 

Therefore, the impact of any reduction 

in resource use caused by the PHE on 

the calculation of the case-mix weight 

would be minimized since the impact 

would be accounted for both in the 

numerator and denominator of the 

formula used to calculate the case-mix 

weight. However, in contrast, the LUPA 

thresholds are based on the number of 

overall visits in a particular case-mix 

group (the threshold is the 10th 

percentile of visits or 2 visits, whichever 

is greater) instead of a relative value 

(like what is used to generate the casemix weight) that would control for the 

impacts of the PHE. We noted that visit 

patterns and some of the decrease in 

overall visits in CY 2020 may not be 

representative of visit patterns in CY 

2022. Therefore, to mitigate any 

potential future and significant shortterm variability in the LUPA thresholds 

due to the COVID–19 PHE, we finalized 

the proposal to maintain the LUPA 

thresholds finalized and displayed in 

Table 17 in the CY 2020 HH PPS final 

rule with comment period (84 FR 

60522) for CY 2022 payment purposes. 

For CY 2023, we are proposing to 

update the LUPA thresholds using CY 

2021 Medicare home health claims (as 

of March 21, 2022) linked to OASIS 

assessment data. After reviewing the CY 

2021 home health claims utilization 

data we determined that visit patterns 

have stabilized. Our data analysis 

indicates that visits in 2021 were similar 

to visits in 2020. We believe that CY 

2021 data will be more indicative of 

visit patterns in CY 2023 rather than 

continuing to use the LUPA thresholds 

derived from the CY 2018 data prePDGM. Therefore, we are proposing to 

update the LUPA thresholds for CY 

2023 using data from CY 2021. In 

general, there is not much variation in 

the updated LUPA thresholds; 280 casemix groups had no change in their 

LUPA threshold. There are 120 case-mix 

groups that had their LUPA threshold go 

down by one visit and 18 case-mix 

groups that have their LUPA threshold 

go up by a visit. There are 12 case-mix 

groups that had their LUPA threshold go 

down by two visits and 2 case-mix 

groups that had their LUPA threshold go 

down by three visits. 

The proposed LUPA thresholds for 

the CY 2023 PDGM payment groups 

with the corresponding Health 

Insurance Prospective Payment System 

(HIPPS) codes and the case-mix weights 

are listed in Table B26. We solicit 

public comments on the proposed 

updates to the LUPA thresholds for CY 

2023. 

b. CY 2023 Functional Impairment 

Levels 

Under the PDGM, the functional 

impairment level is determined by 

responses to certain OASIS items 

associated with activities of daily living 

and risk of hospitalization; that is, 

responses to OASIS items M1800– 

M1860 and M1033. A home health 

period of care receives points based on 

each of the responses associated with 

these functional OASIS items, which are 

then converted into a table of points 

corresponding to increased resource 

use. 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. That is, the higher the points, the 

higher the response is associated with 

increased resource use. The sum of all 

of these points results in a functional 

impairment score which is used to 

group home health periods into one of 

three functional impairment levels with 

similar resource use. The three 

functional impairment levels of low, 

medium, and high were designed so that 

approximately one-third of home health 

periods from each of the clinical groups 

fall within each level. This means home 

health periods in the low impairment 

level have responses for the 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 

functional OASIS items that are 

associated with the highest resource use 

on average. 

For CY 2023, we propose to use CY 

2021 claims data to update the 

functional points and functional 

impairment levels by clinical group. 

The CY 2018 HH PPS proposed rule (82 

FR 35320) and the technical report from 

December 2016, posted on the Home 

Health PPS Archive webpage located at: 

https://www.cms.gov/medicare/homehealth-pps/home-health-pps-archive, 

provide a more detailed explanation as 

to the construction of these functional 

impairment levels using the OASIS 

items. We are proposing to use this 

same methodology previously finalized 

to update the functional impairment 

levels for CY 2023. The updated OASIS 

functional points table and the table of 

functional impairment levels by clinical 

group for CY 2023 are listed in Tables 

B21 and B22, respectively. We solicit 

public comments on the updates to 


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functional points and the functional 

impairment levels by clinical group. 

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TABLE B21: PROPOSED OASIS POINTS TABLE FOR CY 2023 

Percent of 

Periods in 

Responses Points 2021 with 

2023 this 

Response 

Cate1mrv 

M1800: Grooming 0 or 1 0 31.6% 

2 or 3 3 68.4% 

M1810: Current Ability to Dress Upper Body 0 or 1 0 26.3% 

2 or 3 5 73.7% 

0 or 1 0 12.4% 

M1820: Current Ability to Dress Lower Body 2 4 64.8% 

3 12 22.8% 

0 or 1 0 3.1% 

M1830: Bathing 2 2 12.3% 

3 or4 9 51.2% 

5 or 6 17 33.5% 

M1840: Toilet Transferring 0 or 1 0 63.6% 

2, 3 or 4 5 36.4% 

0 0 1.8% 

M1850: Transferring 1 3 22.5% 

2, 3, 4 or 5 6 75.7% 

0 or 1 0 3.9% 

M1860: Ambulation/Locomotion 2 6 15.1% 

3 5 63.4% 

4. 5 or 6 20 17.5% 

Three or fewer items 

marked (Excluding 0 66.2% 

M1033: Risk of Hospitalization responses 8. 9 or 10) 

Four or more items 

marked (Excluding 10 33.8% 

responses 8, 9 or 10) 

Source: CY 2021 Home Health Claims Data, Periods that end in CY 2021 accessed from the CCW on March 21, 2022. 

Note: For item Ml 860, the point values for response 2 is worth more than the point values for response 3. There 

may be times in which the resource use for certain OASIS items associated with functional impairment will result in 

a seemingly inverse relationship to the response reported. However, this is the result of the direct association 

between the responses reported on the OASIS items and actual resource use. 
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TABLE BB22: PROPOSED THRESHOLDS FOR FUNCTIONAL LEVELS BY 

CLINICAL GROUP, FOR CY 2023 

Clinical Group Level of Points 

Impairment (2023) 

Low 0-31 

MMTA-Other Medium 32-42 

High 43+ 

Low 0-30 

Behavioral Health Medium 31-42 

High 43+ 

Low 0-32 

Complex Nursing Interventions Medium 33-53 

High 54+ 

Low 0-32 

Musculoskeletal Rehabilitation Medium 33-44 

High 45+ 

Low 0-34 

Neuro Rehabilitation Medium 35-50 

High 51+ 

Low 0-32 

Wound Medium 33-50 

High 51+ 

Low 0-32 

MMTA - Surgical Aftercare Medium 33-42 

High 43+ 

Low 0-30 

MMTA - Cardiac and Circulatory Medium 31-42 

High 43+ 

Low 0-29 

MMTA - Endocrine Medium 30-42 

High 43+ 

Low 0-32 

MMTA- Gastrointestinal tract and Medium 33-47 Genitourinary system High 48+ 

Low 0-32 

MMTA- Infectious Disease, Neoplasms, and Medium 33-44 Blood-Forming Diseases 

High 45+ 

Low 0-32 

MMTA - Respiratory Medium 33-45 

High 46+ 

Source: CY 2021 Home Health Claims Data, Periods that end in CY 2021 accessed from the CCW on March 21, 2022. 
Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 37629 

c. CY 2023 Comorbidity Subgroups 

Thirty-day periods of care receive a 

comorbidity adjustment category based 

on the presence of certain secondary 

diagnoses reported on home health 

claims. These diagnoses are based on a 

home-health specific list of clinically 

and statistically significant secondary 

diagnosis subgroups with similar 

resource use, meaning the diagnoses 

have at least as high as the median 

resource use and are reported in more 

than 0.1 percent of 30-day periods of 

care. Home health 30-day periods of 

care can receive a comorbidity 

adjustment under the following 

circumstances: 

• Low comorbidity adjustment: There 

is a reported secondary diagnosis on the 

home health-specific comorbidity 

subgroup list that is associated with 

higher resource use. 

• High comorbidity adjustment: 

There are two or more secondary 

diagnoses on the home health-specific 

comorbidity subgroup interaction list 

that are associated with higher resource 

use when both are reported together 

compared to when they are reported 

separately. That is, the two diagnoses 

may interact with one another, resulting 

in higher resource use. 

• No comorbidity adjustment: A 30- 

day period of care receives no 

comorbidity adjustment if no secondary 

diagnoses exist or do not meet the 

criteria for a low or high comorbidity 

adjustment. 

In the CY 2019 HH PPS final rule with 

comment period (83 FR 56406), we 

stated that 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. For CY 2023, we 

propose to use the same methodology 

used to establish the comorbidity 

subgroups to update the comorbidity 

subgroups using CY 2021 home health 

data. 

For CY 2023, we propose to update 

the comorbidity subgroups to include 23 

low comorbidity adjustment subgroups 

as identified in Table B23 and 94 high 

comorbidity adjustment interaction 

subgroups as identified in Table B24. 

The proposed 23 low comorbidity 

adjustment subgroups and 94 high 

comorbidity adjustment interactions 

reflect the proposed coding changes 

detailed in section II.B.3.c. of this 

proposed rule. The proposed CY 2023 

low comorbidity adjustment subgroups 

and the high comorbidity adjustment 

interaction subgroups including those 

diagnoses within each of these 

comorbidity adjustments will also be 

posted on the HHA Center webpage at 

https://www.cms.gov/Center/ProviderType/Home-Health-Agency-HHACenter. 

We invite comments on the proposed 

updates to the low comorbidity 

adjustment subgroups and the high 

comorbidity adjustment interactions for 

CY 2023. 

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TABLE B23: LOW COMORBIDITY ADJUSTMENT SUBGROUPS FOR CY 2023 

Low Comorbidity 

Sube:rouo Descriotion 

Cerebral 4 Sequelae of Cerebrovascular Diseases, includes Cerebral Atherosclerosis and Stroke Sequelae 

Circulatory 10 Varicose Veins and Lymphedema 

Circulatory 2 Hemolytic, Aplastic, and Other Anemias 

Circulatory 7 Atherosclerosis, includes Peripheral Vascular Disease, Aortic Aneurysms and Hypotension 

Circulatory 9 Other Venous Embolism and Thrombosis 

Endocrine 4 Other Combined Immunodeficiencies and Malnutrition, includes graft-versus-host-disease 

Gastrointestinal 1 Crohn's, Ulcerative Colitis, and other Functional Intestinal Disorders 

Heart 10 Dysrhythmias, includes Atrial Fibrillation and Atrial Flutter 

Heart 11 Heart Failure 

Musculoskeletal 2 Rheumatoid Arthritis 

Neoplasm 1 Malignant Neoplasms of Lip, Oral Cavity and Pharynx, includes Head and Neck Cancers 

Neoplasm 18 Secondaty Neoplasms of Uriruuy and Reproductive Systems, Skin, Brain, and Bone 

Neoplasm2 Malignant Neoplasms of Digestive Organs, includes Gastrointestinal Cancers 

Neoplasm6 Malignant neoplasms of trachea, bronchus, lung, and mediastinum 

Neurological 10 Diabetes with neuropathy 

Neurological 11 Disease of the Macula and Blindness/Low Vision 

Neurological 12 Nondiabetic neuropathy 

Neurological 5 Spinal Muscular Atrophy, Systemic atrophy and Motor Neuron Disease 

Neurological 7 Paraplegia, Hemiplegia and Quadriplegia 

Respiratory 10 2019 Novel Coronavirus 

Skin 1 Cutaneous Abscess, Cellulitis, and Lymphangitis 

Skin3 Diseases of arteries, arterioles and capillaries with ulceration and non-pressure chronic ulcers 

Skin4 Stages Two-Four and unstageable pressure ulcers by site 

Source: CY 2021 Home Health Claims Data, Periods that end in CY 2021 accessed on the CCW March 21, 2022. 

TABLE B24: HIGH COMORBIDITY ADJUSTMENT INTERACTIONS FOR CY 2023 

Comorbidity 

Subgroup Comorbidity Comorbidity 

Interaction Group Description Group Description 

Sequelae of Cerebrovascular Other disorders of the kidney Diseases, includes Cerebral 1 Cerebral 4 Atherosclerosis and Stroke Renal 3 and ureter, excluding chronic 

Sequelae kidney disease and ESRD 

Sequelae of Cerebrovascular 

2 Cerebral 4 Diseases, includes Cerebral Endocrine 3 Type 1, Type 2, and Other 

Atherosclerosis and Stroke Specified Diabetes 

Se<1uelae 

3 Circulatory 9 Other Venous Embolism and Endocrine 3 Type 1, Type 2, and Other 

Thrombosis Specified Diabetes 
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Comorbidity 

Subgroup Comorbidity Comorbidity 

Interaction Group Description Group Description 

Other Venous Embolism and Other disorders of the kidney 

4 Circulatory 9 Thrombosis Renal 3 and ureter, excluding chronic 

kidney disease and ESRD 

Spinal Muscular Atrophy, 

5 Neurological 5 Systemic atrophy and Motor Neurological 8 Epilepsy 

Neuron Disease 

Obesity, and Disorders of Spinal Muscular Atrophy, 

6 Endocrine 5 Metabolism and Fluid Balance Neurological 5 Systemic atrophy and Motor 

Neuron Disease 

7 Heart 11 Heart Failure Neurological 11 Disease of the Macula and 

Blindness/Low Vision 

Spinal Muscular Atrophy, Chronic kidney disease and 8 Neurological 5 Systemic atrophy and Motor Renal 1 ESRD Neuron Disease 

Sequelae of Cerebrovascular 

9 Cerebral 4 Diseases, includes Cerebral Infectious 1 C-diff, MRSA, E-coli Atherosclerosis and Stroke 

Seauelae 

Sequelae of Cerebrovascular 

10 Cerebral 4 Diseases, includes Cerebrcll Circulatory 2 Hemolytic, Aplastic, and 

Atherosclerosis and Stroke Other Anemias 

Seauelae 

Phobias, Other Anxiety and Spinal Muscular Atrophy, 

11 Behavioral 5 Neurological 5 Systemic atrophy and Motor Obsessive Compulsive Disorders Neuron Disease 

Sequelae of Cerebrovascular 

12 Cerebral 4 Diseases, includes Cerebral Neurological 10 Diabetes with neuropathy Atherosclerosis and Stroke 

Seauelae 

Sequelae of Cerebrovascular 

13 Cerebral 4 Diseases, includes Cerebral Heart 11 Heart Failure Atherosclerosis and Stroke 

Seauelae 

14 Neurological 10 Diabetes with neuropathy Skin 1 Cutaneous Abscess, 

Cellulitis, and Lymphangitis 

15 Endocrine 1 Hypothyroidism Neurological 7 Paraplegia, Hemiplegia and 

Quadriplegia 

Alzheimer's disease and related Spinal Muscular Atrophy, 

16 Neurological 4 dementias Neurological 5 Systemic atrophy and Motor 

Neuron Disease 

Spinal Muscular Atrophy, 

17 Heart 12 Other Heart Diseases Neurological 5 Systemic atrophy and Motor 

Neuron Disease 

Mood Disorders, includes Spinal Muscular Atrophy, 

18 Behavioral 2 Depression and Bipolar Disorder Neurological 5 Systemic atrophy and Motor 

Neuron Disease 
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Comorbidity 

Subgroup Comorbidity Comorbidity 

Interaction Group Description Group Description 

Diseases of arteries, arterioles 

19 Neurological 8 Epilepsy Skin3 and capillaries with ulceration 

and non-pressure chronic 

ulcers 

Spinal Muscular Atrophy, 

20 Endocrine 1 Hypothyroidism Neurological 5 Systemic atrophy and Motor 

Neuron Disease 

Psychotic, major depressive, and Diseases of arteries, arterioles dissociative disorders, includes and capillaries with ulceration 21 Behavioral 4 unspecified dementia, eating Skin3 

disorder and intellectual and non-pressure chronic 

disabilities ulcers 

22 Circulatory 10 Varicose Veins and Heart 12 Other Heart Diseases Lvmohedema 

Paraplegia, Hemiplegia and Chronic Obstructive 

23 Neurological 7 Respiratory 5 Pulmonary Disease, and Quadriplegia Asthma, and Bronchiectasis 

24 Endocrine 5 Obesity, and Disorders of Skin 1 Cutaneous Abscess, 

Metabolism and Fluid Balance Cellulitis, and Lymphangitis 

25 Behavioral 2 Mood Disorders, includes Neurological 7 Paraplegia, Hemiplegia and 

Depression and Bipolar Disorder Quadriplegia 

26 Behavioral 2 Mood Disorders, includes Circulatory 10 Varicose Veins and 

Depression and Bipolar Disorder Lymphedema 

27 Circulatory 10 Varicose Veins and Circulatory 4 Hypertensive Chronic Kidney 

Lymphedema Disease 

Other Combined 

28 Circulatory 9 Other Venous Embolism and Endocrine 4 Immunodeficiencies and 

Thrombosis Malnutrition, includes graftversus-host-disease 

Type 1, Type 2, and Other Spinal Muscular Atrophy, 

29 Endocrine 3 Neurological 5 Systemic atrophy and Motor Specified Diabetes Neuron Disease 

Diseases of arteries, arterioles 

30 Heart? Chronic lschemic Heart Disease Skin3 and capillaries with ulceration 

and non-pressure chronic 

ulcers 

31 Circulatory 10 Varicose Veins and Endocrine 3 Type 1, Type 2, and Other 

Lymphedema Specified Diabetes 

Spinal Muscular Atrophy, 

32 Neurological 10 Diabetes with neuropathy Neurological 5 Systemic atrophy and Motor 

Neuron Disease 

Diseases of arteries, arterioles 

33 Heart 12 Other Heart Diseases Skin3 and capillaries with ulceration 

and non-pressure chronic 

ulcers 

34 Neurological 4 Alzheimer's disease and related Skin3 Diseases of arteries, 

dementias arterioles and capillaries with 
Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 37633 


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Comorbidity 

Subgroup Comorbidity Comorbidity 

Interaction Group Description Group Description 

ulceration and non-pressure 

chronic ulcers 

35 Behavioral 5 Phobias, Other Anxiety and Circulatory 10 Varicose Veins and 

Obsessive Compulsive Disorders Lymphedema 

Dysrhythmias, includes Atrial Spinal Muscular Atrophy, 

36 Heart 10 Fibrillation and Atrial Flutter Neurological 5 Systemic atrophy and Motor 

Neuron Disease 

37 Circulatory 4 Hypertensive Chronic Kidney Neurological 7 Paraplegia, Hemiplegia and 

Disease Quadriplegia 

Hypertensive Chronic Kidney Spinal Muscular Atrophy, 

38 Circulatory 4 Neurological 5 Systemic atrophy and Motor Disease Neuron Disease 

39 Circulatory 2 Hemolytic, Aplastic, and Other Skin 1 Cutaneous Abscess, 

Anemias Cellulitis, and Lymphangitis 

Spinal Muscular Atrophy, 

40 Heart 11 Heart Failure Neurological 5 Systemic atrophy and Motor 

Neuron Disease 

Spinal Muscular Atrophy, Other disorders of the kidney 

41 Neurological 5 Systemic atrophy and Motor Renal 3 and ureter, excluding chronic 

Neuron Disease kidney disease and ESRD 

Diseases of arteries, arterioles 

42 Circulatory 4 Hypertensive Chronic Kidney Skin3 and capillaries with ulceration 

Disease and non-pressure chronic 

ulcers 

43 Circulatory 1 Nutritional, Enzymatic, and Skin 1 Cutaneous Abscess, 

Other Heredity Anemias Cellulitis, and Lymphangitis 

44 Circulatory 10 Varicose Veins and Heart 11 Heart Failure Lymphedema 

Varicose Veins and Obesity, and Disorders of 

45 Circulatory 10 Lymphedema Endocrine 5 Metabolism and Fluid 

Balance 

46 Heart 11 Heart Failure Neurological 7 Paraplegia, Hemiplegia and 

Quadriplegia 

Diseases of arteries, arterioles 

47 Respiratory 4 Bronchitis, Emphysema, and Skin3 and capillaries with ulceration 

Interstitial Lung Disease and non-pressure chronic 

ulcers 

Hemolytic, Aplastic, and Other Spinal Muscular Atrophy, 

48 Circulatory 2 Anemias Neurological 5 Systemic atrophy and Motor 

Neuron Disease 

49 Heart 10 Dysrhythmias, includes Atrial Neurological 7 Paraplegia, Hemiplegia and 

Fibrillation and Atrial Flutter Quadriplegia 

Sequelae of Cerebrovascular 

50 Cerebral 4 Diseases, includes Cerebral Neurological 11 Disease of the Macula and 

Atherosclerosis and Stroke Blindness/Low Vision 

Sequelae 
37634 Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 


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Comorbidity 

Subgroup Comorbidity Comorbidity 

Interaction Group Description Group Description 

Diseases of arteries, arterioles 

51 Neurological 11 Disease of the Macula and Skin3 and capillaries with ulceration 

Blindness/Low Vision and non-pressure chronic 

ulcers 

Diseases of arteries, arterioles 

52 Behavioral 2 Mood Disorders, includes Skin3 and capillaries with ulceration 

Depression and Bipolar Disorder and non-pressure chronic 

ulcers 

Sequelae of Cerebrovascular Diseases of arteries, arterioles 

53 Cerebral 4 Diseases, includes Cerebral Skin3 and capillaries with ulceration 

Atherosclerosis and Stroke and non-pressure chronic 

SeQuelae ulcers 

54 Circulatory 10 Varicose Veins and Heart 10 Dysrhythmias, includes Atrial 

Lymphedema Fibrillation and Atrial Flutter 

Spinal Muscular Atrophy, Paraplegia, Hemiplegia and 55 Neurological 5 Systemic atrophy and Motor Neurological 7 

Neuron Disease Quadriplegia 

Diseases of arteries, arterioles 

56 Circulatory 2 Hemolytic, Aplastic, and Other Skin3 and capillaries with ulceration 

Anemias and non-pressure chronic 

ulcers 

57 Behavioral 5 Phobias, Other Anxiety and Neurological 7 Paraplegia, Hemiplegia and 

Obsessive Compulsive Disorders Quadriplegia 

Other Combined Diseases of arteries, arterioles 

58 Endocrine 4 Immunodeficiencies and Skin3 and capillaries with ulceration 

Malnutrition, includes graft- and non-pressure chronic 

versus-host-disease ulcers 

Other Combined 

59 Circulatory 10 Varicose Veins and Endocrine 4 Immunodeficiencies and 

Lymphedema Malnutrition, includes graftversus-host-disease 

Diseases of arteries, arterioles 

60 Musculoskeletal 3 Joint Pain Skin3 and capillaries with ulceration 

and non-pressure chronic 

ulcers 

Diseases of arteries, arterioles 

61 Skin 1 Cutaneous Abscess, Cellulitis, Skin3 and capillaries with ulceration 

and Lymphangitis and non-pressure chronic 

ulcers 

Diseases of arteries, arterioles 

62 Endocrine 1 Hypothyroidism Skin3 and capillaries with ulceration 

and non-pressure chronic 

ulcers 

Diseases of arteries, arterioles 

63 Heart 9 Valve Disorders Skin3 and capillaries with ulceration 

and non-pressure chronic 

ulcers 

64 Respiratory 9 Respiratory Failure and Skin3 Diseases of arteries, 

Atelectasis arterioles and capillaries with 
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Comorbidity 

Subgroup Comorbidity Comorbidity 

Interaction Grouo Descriotion Grouo Deserio ti on 

ulceration and non-pressure 

chronic ulcers 

Paraplegia, Hemiplegia and Other disorders of the kidney 

65 Neurological 7 Quadriplegia Renal 3 and ureter, excluding chronic 

kidney disease and ESRD 

66 Circulatory 1 Nutritional, Enzymatic, and Neurological 7 Paraplegia, Hemiplegia and 

Other Heredity Anemias Quadriplegia 

Diseases of arteries, arterioles 

67 Circulatory 1 Nutritional, Enzymatic, and Skin3 and capillaries with ulceration 

Other Heredity Anemias and non-pressure chronic 

ulcers 

Diseases of arteries, arterioles 

68 Heart 8 Other Pulmonary Heart Diseases Skin3 and capillaries with ulceration 

and non-pressure chronic 

ulcers 

Diseases of arteries, 

69 Musculoskeletal 2 Rheumatoid Arthritis Skin3 arterioles and capillaries with 

ulceration and non-pressure 

chronic ulcers 

Diseases of arteries, 

70 Heart 11 Heart Failure Skin3 arterioles and capillaries with 

ulceration and non-pressure 

chronic ulcers 

Diseases of arteries, 

71 Endocrine 5 Obesity, and Disorders of Skin3 arterioles and capillaries with 

Metabolism and Fluid Balance ulceration and non-pressure 

chronic ulcers 

Atherosclerosis, includes Diseases of arteries, 

72 Circulatory 7 Peripheral Vascular Disease, Skin3 arterioles and capillaries with 

Aortic Aneurysms and ulceration and non-pressure 

Hypotension chronic ulcers 

73 Circulatory 2 Hemolytic, Aplastic, and Other Neurological 7 Paraplegia, Hemiplegia and 

Anemias Quadriplegia 

Diseases of arteries, 

74 Musculoskeletal 4 Lumbar Spinal Stenosis Skin3 arterioles and capillaries with 

ulceration and non-pressure 

chronic ulcers 

Diseases of arteries, 

75 Neurological 12 Nondiabetic neuropathy Skin3 arterioles and capillaries with 

ulceration and non-pressure 

chronic ulcers 

Diseases of arteries, 

76 Endocrine 3 Type 1, Type 2, and Other Skin3 arterioles and capillaries with 

Specified Diabetes ulceration and non-pressure 

chronic ulcers 

Spinal Muscular Atrophy, Diseases of arteries, 

arterioles and capillaries with 77 Neurological 5 Systemic atrophy and Motor Skin3 ulceration and non-pressure Neuron Disease chronic ulcers 
37636 Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 


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Comorbidity 

Subgroup Comorbidity Comorbidity 

Interaction Group Description Group Description 

Other Combined 

78 Endocrine 4 Immunodeficiencies and Neurological 7 Paraplegia, Hemiplegia and 

Malnutrition, includes graft- Quadriplegia 

versus-host-disease 

Psychotic, major depressive, and 

dissociative disorders, includes Stages Two-Four and 

79 Behavioral 4 unspecified dementia, eating Skin4 unstageable pressure ulcers 

disorder and intellectual by site 

disabilities 

Nutritional, Enzymatic, and Stages Two-Four and 

80 Circulatory 1 Other Heredity Anemias Skin4 unstageable pressure ulcers 

by site 

Stages Two-Four and 

81 Musculoskeletal 3 Joint Pain Skin4 unstageable pressure ulcers 

by site 

Alzheimer's disease and related Stages Two-Four and 

82 Neurological 4 dementias Skin4 unstageable pressure ulcers 

by site 

Stages Two-Four and 

83 Respiratory 2 Whooping cough Skin4 unstageable pressure ulcers 

by site 

Stages Two-Four and 

84 Heart 11 Heart Failure Skin4 unstageable pressure ulcers 

by site 

Stages Two-Four and 

85 Neurological 10 Diabetes with neuropathy Skin4 unstageable pressure ulcers 

by site 

Diseases of arteries, 

86 Circulatory 10 Varicose Veins and Skin3 arterioles and capillaries with 

Lymphcdcma ulceration and non-pressure 

chronic ulcers 

Stages Two-Four and 

87 Infectious 1 C-diff, MRSA, E-coli Skin4 unstageable pressure ulcers 

by site 

Sequelae of Cerebrovascular Stages Two-Four and Diseases, includes Cerebral 88 Cerebral 4 AU1erosclerosis and Stroke Skin4 unstageable pressure ulcers 

SeQuelae by site 

Other disorders of the kidney and Stages Two-Four and 

89 Renal 3 ureter, excluding chronic kidney Skin4 unstageable pressure ulcers 

disease and ESRD by site 

Type 1, Type 2, and Other Stages Two-Four and 

90 Endocrine 3 Specified Diabetes Skin4 unstageable pressure ulcers 

by site 

Other Combined Stages Two-Four and Immunodeficiencies and 91 Endocrine 4 Malnutrition, includes graft- Skin4 unstageable pressure ulcers 

versus-host-disease by site 
Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 37637 

BILLING CODE 4120–01–C 

d. CY 2023 PDGM Case-Mix Weights 

As finalized in the CY 2019 HH PPS 

final rule with comment period (83 FR 

56502), the PDGM places patients into 

meaningful payment categories based on 

patient and other characteristics, such 

as timing, admission source, clinical 

grouping using the reported principal 

diagnosis, functional impairment level, 

and comorbid conditions. The PDGM 

case-mix methodology results in 432 

unique case-mix groups called home 

health resource groups (HHRGs). We 

also finalized a policy in the CY 2019 

HH PPS final rule with comment period 

(83 FR 56515) to recalibrate annually 

the PDGM case-mix weights using a 

fixed effects model with the most recent 

and complete utilization data available 

at the time of annual rulemaking. 

Annual recalibration of the PDGM casemix 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 recalibrated 

CY 2023 case-mix weights, we used CY 

2021 home health claims data with 

linked OASIS data (as of March 21, 

2021). These data are the most current 

and complete data available at this time. 

We believe that recalibrating the casemix weights using data from CY 2021 

would be reflective of PDGM utilization 

and patient resource use for CY 2023. 

The proposed recalibrated case-mix 

weights will be updated based on more 

complete CY 2021 claims data for the 

final rule. 

The claims data provide visit-level 

data and data on whether non-routine 

supplies (NRS) were provided during 

the period and the total charges of NRS. 

We determine the case-mix weight for 

each of the 432 different PDGM 

payment groups by regressing resource 

use on a series of indicator variables for 

each of the categories using a fixed 

effects model as described in the 

following steps: 

Step 1: Estimate a regression model to 

assign a functional impairment level to 

each 30-day period. The regression 

model estimates the relationship 

between a 30-day period’s resource use 

and the functional status and risk of 

hospitalization items included in the 

PDGM, which are obtained from certain 

OASIS items. We refer readers to Table 

B21 for further information on the 

OASIS items used for the functional 

impairment level under the PDGM. We 

measure resource use with the cost-perminute + NRS approach that uses 

information from 2020 home health cost 

reports. We use 2020 home health cost 

report data because it is the most 

complete cost report data available at 

the time of rulemaking. Other variables 

in the regression model include the 30- 

day period’s admission source, clinical 

group, and 30-day period timing. We 

also include home health agency level 

fixed effects in the regression model. 

After estimating the regression model 

using 30-day periods, we divide the 

coefficients that correspond to the 

functional status and risk of 

hospitalization items by 10 and round to 

the nearest whole number. Those 

rounded numbers are used to compute 

a functional score for each 30-day 

period by summing together the 

rounded numbers for the functional 

status and risk of hospitalization items 

that are applicable to each 30-day 

period. Next, each 30-day period is 

assigned to a functional impairment 

level (low, medium, or high) depending 

on the 30-day period’s total functional 

score. Each clinical group has a separate 

set of functional thresholds used to 

assign 30-day periods into a low, 

medium or high functional impairment 

level. We set those thresholds so that we 

assign roughly a third of 30-day periods 

within each clinical group to each 

functional impairment level (low, 

medium, or high). 

Step 2: A second regression model 

estimates the relationship between a 30- 

day period’s resource use and indicator 

variables for the presence of any of the 

comorbidities and comorbidity 

interactions that were originally 

examined for inclusion in the PDGM. 

Like the first regression model, this 

model also includes home health agency 

level fixed effects and includes control 

variables for each 30-day period’s 

admission source, clinical group, 

timing, and functional impairment 

level. After we estimate the model, we 

assign comorbidities to the low 

comorbidity adjustment if any 

comorbidities have a coefficient that is 

statistically significant (p-value of 0.05 

or less) and which have a coefficient 

that is larger than the 50th percentile of 

positive and statistically significant 

comorbidity coefficients. If two 

comorbidities in the model and their 

interaction term have coefficients that 

sum together to exceed $150 and the 

interaction term is statistically 

significant (p-value of 0.05 or less), we 

assign the two comorbidities together to 

the high comorbidity adjustment. 

Step 3: After Step 2, each 30-day 

period is assigned to a clinical group, 

admission source category, episode 

timing category, functional impairment 

level, and comorbidity adjustment 

category. For each combination of those 

variables (which represent the 432 

different payment groups that comprise 

the PDGM), we then calculate the 10th 

percentile of visits across all 30-day 

periods within a particular payment 

group. If a 30-day period’s number of 

visits is less than the 10th percentile for 

their payment group, the 30-day period 

is classified as a Low Utilization 

Payment Adjustment (LUPA). If a 

payment group has a 10th percentile of 

visits that is less than two, we set the 


lotter on DSK11XQN23PROD with PROPOSALS2EP23JN22.035</GPH>

Comorbidity 

Subgroup Comorbidity Comorbidity 

Interaction Grouo Descriotion Grouo Descriotion 

Paraplegia, Hemiplegia and Stages Two-Four and 

92 Neurological 7 Quadriplegia Skin4 unstageable pressure ulcers 

by site 

Dysrhythmias, includes Atrial Stages Two-Four and 

93 Heart 10 Fibrillation and Atrial Flutter Skin4 unstageable pressure ulcers 

by site 

Diseases of arteries, arterioles Stages Two-Four and 

94 Skin3 and capillaries with ulceration Skin4 unstageable pressure ulcers 

and non-pressure chronic ulcers by site 

Source: CY 2021 Home Health Claims Data, Periods that end in CY 2021 accessed from the CCW March 21, 2022. 
37638 Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 

LUPA threshold for that payment group 

to be equal to two. That means if a 30- 

day period has one visit, it is classified 

as a LUPA and if it has two or more 

visits, it is not classified as a LUPA. 

Step 4: Take all non-LUPA 30-day 

periods and regress resource use on the 

30-day period’s clinical group, 

admission source category, episode 

timing category, functional impairment 

level, and comorbidity adjustment 

category. The regression includes fixed 

effects at the level of the home health 

agency. After we estimate the model, the 

model coefficients are used to predict 

each 30-day period’s resource use. To 

create the case-mix weight for each 30- 

day period, the predicted resource use 

is divided by the overall resource use of 

the 30-day periods used to estimate the 

regression. 

The case-mix weight is then used to 

adjust the base payment rate to 

determine each 30-day period’s 

payment. Table B25 shows the 

coefficients of the payment regression 

used to generate the weights, and the 

coefficients divided by average resource 

use. 

BILLING CODE 4120–01–P 


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TABLE B25: COEFFICIENT OF PAYMENT REGRESSION AND COEFFICIENT 

DIVIDED BY A VERA GE RESOURCE USE 

Percentage of Coefficient 

Divided by Variable Coefficient 30-Day Periods Average for this Model Resource Use 

Clinical Group and Functional Impairment Level rMMTA - Other - Low is excluded 

MMTA - Other - Medium Functional $152.20 1.1% 0.1028 

MMTA - Other - Hi2h Functional $317.60 1.1% 0.2145 

MMTA - Su1"2ical Aftercare - Low Functional -$24.71 1.4% -0.0167 

MMTA - Suwcal Aftercare - Medium Functional $145.03 0.9% 0.0979 

MMTA - Sur2;ical Aftercare - Hi2h Functional $356.97 1.0% 0.2411 

MMTA - Cardiac and Circulatory - Low Functional -$46.75 6.4% -0.0316 

MMTA - Cardiac and Circulatory - Medium Functional $126.40 6.6% 0.0854 

MMTA - Cardiac and Circulatory - Hi2h Functional $298.41 5.8% 0.2015 

MMTA - Endocrine - Low Functional $338.60 2.4% 0.2287 

MMTA - Endocrine - Medium Functional $437.25 2.5% 0.2953 

MMTA - Endocrine - Hi2h Functional $594.17 2.1% 0.4013 

MMTA - Gastrointestinal tract and Genitourinary system - -$72.68 1.7% -0.0491 Low Functional 

MMTA - Gastrointestinal tract and Genitourinary system - $130.08 1.5% 0.0878 Medium Functional 

MMTA - Gastrointestinal tract and Genitourinary system - $260.39 1.5% 0.1759 Hi!!h Functional 

MMTA - Infectious Disease, Neoplasms, and Blood-Forming -$17.53 1.9% -0.0118 Diseases - Low Functional 

MMTA - Infectious Disease, Neoplasms, and Blood-Forming $126.08 1.1% 0.0851 Diseases - Medium Functional 

MMTA - Infectious Disease, Neoplasms, and Blood-Forming $312.51 1.5% 0.2111 Diseases - Hi!!h Functional 

MMTA - Respiratory - Low Functional -$31.20 3.2% -0.0211 

MMTA - Respiratory - Medium Functional $145.08 2.4% 0.0980 

MMTA - Respiratory - Hi!!h Functional $322.21 2.5% 0.2176 

Behavioral Health - Low Functional -$94.58 0.8% -0.0639 

Behavioral Health - Medium Functional $104.75 0.8% 0.0707 

Behavioral Health - Hi!!h Functional $247.44 0.8% 0.1671 

Complex - Low Functional -$87.93 1.1% -0.0594 

Complex - Medium Functional $125.39 0.8% 0.0847 

Complex - Hie:h Functional $90.24 1.0% 0.0609 

MS Rehab - Low Functional $109.45 7.9% 0.0739 

MS Rehab - Medium Functional $236.08 5.0% 0.1594 

MS Rehab - Hi!!h Functional $436.63 6.7% 0.2949 

Neuro - Low Functional $237.17 3.8% 0.1602 
Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 37639 

17HHA Center web page: https://www.cms.gov/ 

Center/Provider-Type/Home-Health-Agency-HHACenter. 

The case-mix weights proposed for 

CY 2023 are listed in Table B26 and will 

also be posted on the HHA Center webpage 17 upon display of this proposed 

rule. 


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Percentage of Coefficient 

Divided by Variable Coefficient 30-Day Periods Average for this Model Resource Use 

Neuro - Medium Functional $411.70 3.6% 0.2780 

Neuro - Hieb Functional $622.49 3.7% 0.4204 

Wound - Low Functional $500.34 5.3% 0.3379 

Wound - Medium Functional $663.36 4.3% 0.4480 

Wound - Hieb Functional $856.63 4.8% 0.5785 

Admission Source with Timine (Community Early is excluded) 

Community - Late -$549.55 64.2% -0.3711 

Institutional - Early $324.97 18.3% 0.2195 

Institutional - Late $195.43 5.9% 0.1320 

Comorbidity Adiustment (No Comorbidi111 Adiustment- is excluded) 

Comorbidity Adjustment - Has at least one comorbidity from $86.90 51.5% 0.0587 comorbidity list, no interaction from interaction list 

Comorbidity Adjustment - Has at least one interaction from $298.93 16.4% 0.2019 interaction list 

Constant $1389.08 

Averaee Resource Use $1480.69 

Number of 30-day Periods 8 291253 

Adiusted R-Sauared 0.3259 

Source: CY 2021 Home Health Claims Data, Periods that end in CY 2021 accessed on the CCW March 21, 2022. 
37640 Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 


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Table B26: CASE-MIX WEIGHTS AND LUPA THRESHOLDS FOR EACH HHRG PAYMENT GROUP 

Comorbidity LUPA Visit 

Adjustment Proposed Threshold 

(0 = none, 1 = single Recalibrated (LUPAshave 

Admission Source and comorbidity, Weight for fewer visits than 

HIPPS Clinical Group and Functional Level Timine: 2 = interaction) 2023 the threshold) 

lFCll Behavioral Health - High Early - Community 0 1.1052 4 

1FC21 Behavioral Health - High Early - Community 1 1.1639 4 

1FC31 Behavioral Health - High Early - Community 2 1.3071 4 

2FC11 Behavioral Health - High Early - Institutional 0 1.3247 4 

2FC21 Behavioral Health - High Early - Institutional 1 1.3834 4 

2FC31 Behavioral Health - High Early - Institutional 2 1.5266 4 

3FC11 Behavioral Health - High Late - Community 0 0.7341 2 

3FC21 Behavioral Health - High Late - Community 1 0.7928 2 

3FC31 Behavioral Health - High Late - Community 2 0.9360 2 

4FC11 Behavioral Health - High Late - Institutional 0 1.2372 3 

4FC21 Behavioral Health - High Late - Institutional 1 1.2959 3 

4FC31 Behavioral Health - High Late - Institutional 2 1.4391 3 

lFAll Behavioral Health - Low Early - Community 0 0.8743 3 

1FA21 Behavioral Health - Low Early - Community 1 0.9329 3 

1FA31 Behavioral Health - Low Early - Community 2 1.0761 3 

2FA11 Behavioral Health - Low Early - Institutional 0 1.0937 3 

2FA21 Behavioral Health - Low Early - Institutional 1 1.1524 3 

2FA31 Behavioral Health - Low Early - Institutional 2 1.2956 3 

3FA11 Behavioral Health - Low Late - Community 0 0.5031 2 

3FA21 Behavioral Health - Low Late - Community 1 0.5618 2 

3FA31 Behavioral Health - Low Late - Community 2 0.7050 2 

4FA11 Behavioral Health - Low Late - Institutional 0 1.0062 2 

4FA21 Behavioral Health - Low Late - Institutional 1 1.0649 3 

4FA31 Behavioral Health - Low Late - Institutional 2 1.2081 3 

lFBll Behavioral Health - Medil!lll Early - Community 0 1.0089 4 

1FB21 Behavioral Health - Medil!lll Early - Community 1 1.0676 4 

1FB31 Behavioral Health - Medil!lll Early - Community 2 1.2108 4 

2FB11 Behavioral Health - Medil!lll Early - Institutional 0 1.2283 3 

2FB21 Behavioral Health - Medil!lll Early - Institutional 1 1.2870 4 

2FB31 Behavioral Health - Medil!lll Early - Institutional 2 1.4302 4 

3FB11 Behavioral Health - Medil!lll Late - Community 0 0.6377 2 

3FB21 Behavioral Health - Medil!lll Late - Community 1 0.6964 2 

3FB31 Behavioral Health - Medil!lll Late - Community 2 0.8396 2 

4FB11 Behavioral Health - Medil!lll Late - Institutional 0 1.1409 3 

4FB21 Behavioral Health - Medil!lll Late - Institutional 1 1.1995 3 

4FB31 Behavioral Health - Medil!lll Late - Institutional 2 1.3427 3 

lDCll Complex - High Early - Community 0 0.9991 2 

1DC21 Comolex - High Early - Community 1 1.0578 2 
Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 37641 


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Comorbidity LUPA Visit 

Adjustment Proposed Threshold 

(0 = none, 1 = single Recalibrated (LUPAshave 

Admission Source and comorbidity, Weight for fewer visits than 

IDPPS Clinical Group and Functional Level Timin2 2 = interaction) 2023 the threshold) 

1DC31 Complex - High Early - Community 2 1.2010 2 

2DC11 Complex - High Early - Institutional 0 1.2185 3 2DC21 Complex - High Early - Institutional 1 1.2772 3 2DC31 Complex - High Early - Institutional 2 1.4204 4 

3DC11 Complex - High Late - Community 0 0.6279 2 

3DC21 Complex - High Late - Community 1 0.6866 2 

3DC31 Complex - High Late - Community 2 0.8298 2 

4DC11 Complex - High Late - Institutional 0 1.1311 3 4DC21 Complex - High Late - Institutional 1 1.1897 3 

4DC31 Complex - High Late - Institutional 2 1.3329 3 

lDAll Complex - Low Early - Community 0 0.8787 2 

1DA21 Complex - Low Early - Community 1 0.9374 2 1DA31 Complex - Low Early - Community 2 1.0806 2 

2DA11 Complex - Low Early - Institutional 0 1.0982 3 

2DA21 Complex - Low Early - Institutional 1 1.1569 3 2DA31 Complex - Low Early - Institutional 2 1.3001 3 

3DA11 Complex - Low Late - Community 0 0.5076 2 

3DA21 Complex - Low Late - Community 1 0.5663 2 3DA31 Complex - Low Late - Community 2 0.7095 2 

4DA11 Complex - Low Late - Institutional 0 1.0107 2 

4DA21 Complex - Low Late - Institutional 1 1.0694 2 

4DA31 Complex - Low Late - Institutional 2 1.2126 3 

lDBll Complex - Medium Early - Community 0 1.0228 2 

1DB21 Complex - Medium Early - Community 1 1.0815 2 

1DB31 Complex - Medium Early - Community 2 1.2247 2 

2DB11 Complex - Medium Early - Institutional 0 1.2423 4 

2DB21 Complex - Medium Early - Institutional 1 1.3010 4 

2DB31 Complex - Medium Early - Institutional 2 1.4442 4 

3DB11 Complex - Medium Late - Community 0 0.6517 2 

3DB21 Complex - Medium Late - Community 1 0.7104 2 

3DB31 Complex - Medium Late - Community 2 0.8536 2 

4DB11 Complex - Medium Late - Institutional 0 1.1548 3 

4DB21 Complex - Medium Late - Institutional 1 1.2135 3 

4DB31 Complex - Medium Late - Institutional 2 1.3567 3 

lHCll MMTA - Cardiac - High Early - Community 0 1.1397 4 

1HC21 MMTA - Cardiac - High Early - Community 1 1.1984 3 

1HC31 MMTA - Cardiac - High Early - Community 2 1.3416 3 

2HC11 MMTA - Cardiac - High Early - Institutional 0 1.3591 4 

2HC21 MMTA - Cardiac - High Early - Institutional 1 1.4178 4 

2HC31 MMTA - Cardiac - High Early - Institutional 2 1.5610 4 

3HC11 MMTA - Cardiac - High Late - Community 0 0.7685 2 

3HC21 MMTA - Cardiac - High Late - Community 1 0.8272 2 

3HC31 MMTA - Cardiac - High Late - Community 2 0.9704 3 
37642 Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 


lotter on DSK11XQN23PROD with PROPOSALS2EP23JN22.040</GPH>

Comorbidity LUPA Visit 

Adjustment Proposed Threshold 

(0 = none, 1 = single Recalibrated (LUPAshave 

Admission Source and comorbidity, Weight for fewer visits than 

IDPPS Clinical Group and Functional Level Timin2 2 = interaction) 2023 the threshold) 

4HC11 :MMTA - Cardiac - High Late - Institutional 0 1.2717 4 

4HC21 :MMTA - Cardiac - High Late - Institutional 1 1.3303 3 

4HC31 :MMTA - Cardiac - High Late - Institutional 2 1.4735 4 

lHAll :MMTA - Cardiac - Low Early - Community 0 0.9066 4 

1HA21 :MMTA - Cardiac - Low Early - Community 1 0.9652 3 

1HA31 :MMTA - Cardiac - Low Early - Community 2 1.1084 3 

2HA11 :MMTA - Cardiac - Low Early - Institutional 0 1.1260 3 

2HA21 :MMTA - Cardiac - Low Early - Institutional 1 1.1847 4 

2HA31 :MMTA - Cardiac - Low Early - Institutional 2 1.3279 4 

3HA11 :MMTA - Cardiac - Low Late - Community 0 0.5354 2 

3HA21 :MMTA - Cardiac - Low Late - Community 1 0.5941 2 

3HA31 :MMTA - Cardiac - Low Late - Community 2 0.7373 2 

4HA11 :MMTA - Cardiac - Low Late - Institutional 0 1.0385 3 

4HA21 :MMTA - Cardiac - Low Late - Institutional 1 1.0972 3 4HA31 :MMTA - Cardiac - Low Late - Institutional 2 1.2404 3 

lHBll :MMTA- Cardiac -Medium Early - Community 0 1.0235 4 

1HB21 :MMTA - Cardiac - Medium Early - Community 1 1.0822 4 

1HB31 :MMTA - Cardiac - Medium Early - Community 2 1.2254 4 

2HB11 :MMTA- Cardiac -Medium Early - Institutional 0 1.2430 4 

2HB21 :MMTA - Cardiac - Medium Early - Institutional 1 1.3017 4 

2HB31 :MMTA- Cardiac -Medium Early - Institutional 2 1.4449 4 

3HB11 :MMTA - Cardiac - Medium Late - Community 0 0.6524 2 

3HB21 :MMTA - Cardiac - Medium Late - Community 1 0.7110 2 

3HB31 :MMTA- Cardiac -Medium Late - Community 2 0.8542 2 

4HB11 :MMTA - Cardiac - Medium Late - Institutional 0 1.1555 4 

4HB21 :MMTA- Cardiac -Medium Late - Institutional 1 1.2142 3 

4HB31 :MMTA - Cardiac - Medium Late - Institutional 2 1.3574 4 

lICl 1 :MMT A - Endocrine - High Early - Community 0 1.3394 4 

1IC21 :MMTA- Endocrine - High Early - Community 1 1.3981 4 

1IC31 :MMTA - Endocrine - High Early - Community 2 1.5413 4 

21Cl 1 :MMTA - Endocrine - High Early - Institutional 0 1.5589 4 

2IC21 :MMT A - Endocrine - High Early - Institutional 1 1.6176 4 

2IC31 :MMTA - Endocrine - High Early - Institutional 2 1.7608 4 

31Cl 1 :MMTA - Endocrine - High Late - Community 0 0.9683 3 

3IC21 :MMT A - Endocrine - High Late - Community 1 1.0270 3 

3IC31 :MMTA - Endocrine - High Late - Community 2 1.1702 3 

41Cl 1 :MMTA - Endocrine - High Late - Institutional 0 1.4714 4 

4IC21 :MMT A - Endocrine - High Late - Institutional 1 1.5301 4 

4IC31 :MMTA- Endocrine - High Late - Institutional 2 1.6733 4 

lIAll :MMTA -Endocrine-Low Early - Community 0 1.1668 4 

1IA21 :MMTA - Endocrine - Low Early - Community 1 1.2255 4 

1IA31 :MMTA - Endocrine - Low Early - Community 2 1.3687 3 

21All :MMTA -Endocrine-Low Early - Institutional 0 1.3863 3 
Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 37643 


lotter on DSK11XQN23PROD with PROPOSALS2EP23JN22.041</GPH>

Comorbidity LUPA Visit 

Adjustment Proposed Threshold 

(0 = none, 1 = single Recalibrated (LUPAshave 

Admission Source and comorbidity, Weight for fewer visits than 

IDPPS Clinical Group and Functional Level Timin2 2 = interaction) 2023 the threshold) 

2IA21 :MMTA - Endocrine - Low Early - Institutional 1 1.4450 4 

2IA31 :MMTA - Endocrine - Low Early - Institutional 2 1.5882 4 

3IA11 :MMTA - Endocrine - Low Late - Community 0 0.7957 3 3IA21 :MMTA - Endocrine - Low Late - Community 1 0.8544 2 

3IA31 :MMTA - Endocrine - Low Late - Community 2 0.9976 3 

4IA11 :MMTA - Endocrine - Low Late - Institutional 0 1.2988 3 

4IA21 :MMTA -Endocrine-Low Late - Institutional 1 1.3575 3 4IA31 :MMTA - Endocrine - Low Late - Institutional 2 1.5007 3 

11B11 :MMTA - Endocrine - Medium Early - Community 0 1.2334 4 

1IB21 :MMTA - Endocrine - Medium Early - Community 1 1.2921 4 

1IB31 :MMTA - Endocrine - Medium Early - Community 2 1.4353 4 

21Bl 1 :MMTA - Endocrine - Medium Early - Institutional 0 1.4529 4 2IB21 :MMTA - Endocrine - Medium Early - Institutional 1 1.5116 4 

2IB31 :MMTA - Endocrine - Medium Early - Institutional 2 1.6548 4 

31Bl 1 :MMTA - Endocrine - Medium Late - Community 0 0.8623 3 

3IB21 :MMTA - Endocrine - Medium Late - Community 1 0.9210 3 

3IB31 :MMTA - Endocrine - Medium Late - Community 2 1.0642 3 

41Bl 1 :MMTA - Endocrine - Medium Late - Institutional 0 1.3654 4 

4IB21 :MMTA - Endocrine - Medium Late - Institutional 1 1.4241 3 

4IB31 :MMTA - Endocrine - Medium Late - Institutional 2 1.5673 4 

lJCll :MMTA - GI/GU - High Early - Community 0 1.1140 3 

1JC21 :MMTA - GI/GU - High Early - Community 1 1.1727 2 

1JC31 :MMTA - GI/GU - High Early - Community 2 1.3159 2 

2JC11 :MMTA - GI/GU - High Early - Institutional 0 1.3335 4 

2JC21 :MMTA - GI/GU - High Early - Institutional 1 1.3921 3 

2JC31 :MMTA - GI/GU - High Early - Institutional 2 1.5353 3 

3JC11 :MMTA - GI/GU - High Late - Community 0 0.7428 2 

3JC21 :MMTA - GI/GU - High Late - Community 1 0.8015 2 

3JC31 :MMTA - GI/GU - High Late - Community 2 0.9447 2 

4JC11 :MMTA - GI/GU - High Late - Institutional 0 1.2460 3 

4JC21 :MMTA - GI/GU - High Late - Institutional 1 1.3047 3 

4JC31 :MMTA - GI/GU - High Late - Institutional 2 1.4479 3 

lJAll :MMTA - GI/GU - Low Early - Community 0 0.8890 3 

1JA21 :MMTA - GI/GU - Low Early - Community 1 0.9477 2 

1JA31 :MMTA - GI/GU - Low Early - Community 2 1.0909 2 

2JA11 :MMTA - GI/GU - Low Early - Institutional 0 1.1085 3 

2JA21 :MMTA - GI/GU - Low Early - Institutional 1 1.1672 3 

2JA31 :MMTA - GI/GU - Low Early - Institutional 2 1.3104 4 

3JA11 :MMTA - GI/GU - Low Late - Community 0 0.5179 2 

3JA21 :MMTA - GI/GU - Low Late - Community 1 0.5766 2 

3JA31 :MMTA - GI/GU - Low Late - Community 2 0.7198 2 

4JA11 :MMTA - GI/GU - Low Late - Institutional 0 1.0210 3 

4JA21 :MMTA - GI/GU - Low Late - Institutional 1 1.0797 3 
37644 Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 


lotter on DSK11XQN23PROD with PROPOSALS2EP23JN22.042</GPH>

Comorbidity LUPA Visit 

Adjustment Proposed Threshold 

(0 = none, 1 = single Recalibrated (LUPAshave 

Admission Source and comorbidity, Weight for fewer visits than 

IDPPS Clinical Group and Functional Level Timin2 2 = interaction) 2023 the threshold) 

4JA31 :MMTA - GI/GU - Low Late - Institutional 2 1.2229 3 

lJBl 1 :MMTA - GI/GU - Medium Early - Coll1lllunitv 0 1.0260 3 

1JB21 :MMTA - GI/GU - Medium Early - Coll1lllunity 1 1.0847 3 

1JB31 :MMTA - GI/GU - Medium Early - Coll1lllunitv 2 1.2279 2 

2JB11 :MMTA - GI/GU - Medium Early - Institutional 0 1.2454 4 2JB21 :MMTA - GI/GU - Medium Early - Institutional 1 1.3041 4 

2JB31 :MMTA - GI/GU - Medium Early - Institutional 2 1.4473 4 

3JB11 :MMTA - GI/GU - Medium Late - Coll1lllunitv 0 0.6548 2 3JB21 :MMTA - GI/GU - Medium Late - Coll1lllunitv 1 0.7135 2 

3JB31 :MMTA - GI/GU - Medium Late - Coll1lllunitv 2 0.8567 2 

4JB11 :MMTA - GI/GU - Medium Late - Institutional 0 1.1580 3 4JB21 :MMTA - GI/GU - Medium Late - Institutional 1 1.2167 3 4JB31 :MMTA - GI/GU - Medium Late - Institutional 2 1.3599 3 

lKCll :MMTA- Infectious - High Early - Coll1lllunitv 0 1.1492 2 

1KC21 :MMTA - Infectious - High Early - Coll1lllunitv 1 1.2079 2 1KC31 :MMTA- Infectious - High Early - Coll1lllunity 2 1.3511 2 

2KC11 :MMTA - Infectious - High Early - Institutional 0 1.3687 3 

2KC21 :MMTA - Infectious - High Early - Institutional 1 1.4273 3 

2KC31 :MMTA- Infectious - High Early - Institutional 2 1.5705 3 

3KC11 :MMTA - Infectious - High Late - Coll1lllunity 0 0.7780 2 

3KC21 :MMTA- Infectious - High Late - Coll1lllunitv 1 0.8367 2 

3KC31 :MMTA - Infectious - High Late - Coll1lllunitv 2 0.9799 2 

4KC11 :MMTA - Infectious - High Late - Institutional 0 1.2812 3 

4KC21 :MMTA - Infectious - Hi!!h Late - Institutional 1 1.3399 3 

4KC31 :MMTA - Infectious - Hi!!h Late - Institutional 2 1.4831 3 

lKAll :MMTA - Infectious - Low Early - Coll1lllunity 0 0.9263 2 

1KA21 :MMTA - Infectious - Low Early - Coll1lllunitv 1 0.9850 2 

1KA31 :MMTA - Infectious - Low Early - Coll1lllunitv 2 1.1282 2 

2KA11 :MMTA - Infectious - Low Early - Institutional 0 1.1458 3 

2KA21 :MMTA - Infectious - Low Early - Institutional 1 1.2045 3 

2KA31 :MMTA - Infectious - Low Early - Institutional 2 1.3476 3 

3KA11 :MMTA - Infectious - Low Late - Coll1lllunitv 0 0.5551 2 

3KA21 :MMTA - Infectious - Low Late - Coll1lllunitv 1 0.6138 2 

3KA31 :MMTA - Infectious - Low Late - Coll1lllunitv 2 0.7570 2 

4KA11 :MMTA - Infectious - Low Late - Institutional 0 1.0583 3 

4KA21 :MMTA - Infectious - Low Late - Institutional 1 1.1170 3 4KA31 :MMTA - Infectious - Low Late - Institutional 2 1.2602 3 

lKBll :MMTA - Infectious - Medium Early - Coll1lllunitv 0 1.0233 2 

1KB21 :MMTA - Infectious - Medium Early - Coll1lllunitv 1 1.0820 2 1KB31 :MMTA - Infectious - Medium Early - Coll1lllunitv 2 1.2252 2 

2KB11 :MMTA - Infectious - Medium Early - Institutional 0 1.2427 3 

2KB21 :MMTA - Infectious - Medium Early - Institutional 1 1.3014 3 

2KB31 :MMTA - Infectious - Medium Early - Institutional 2 1.4446 4 
Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 37645 


lotter on DSK11XQN23PROD with PROPOSALS2EP23JN22.043</GPH>

Comorbidity LUPA Visit 

Adjustment Proposed Threshold 

(0 = none, 1 = single Recalibrated (LUPAshave 

Admission Source and comorbidity, Weight for fewer visits than 

IDPPS Clinical Group and Functional Level Timin2 2 = interaction) 2023 the threshold) 

3KB11 :MMTA - Infectious - Medium Late - Community 0 0.6521 2 

3KB21 :MMTA - Infectious - Medium Late - Community 1 0.7108 2 

3KB31 :MMTA - Infectious - Medium Late - Community 2 0.8540 2 

4KB11 :MMTA - Infectious - Medium Late - Institutional 0 1.1553 3 4KB21 :MMTA - Infectious - Medium Late - Institutional 1 1.2140 3 

4KB31 :MMTA - Infectious - Medium Late - Institutional 2 1.3571 3 

lACll :MMTA - Other- High Early - Community 0 1.1526 4 

1AC21 :MMTA - Other- Hi!!h Early - Community 1 1.2113 4 

1AC31 :MMTA - Other - Hi!!'h Early - Community 2 1.3545 3 

2AC11 :MMTA - Other- High Early - Institutional 0 1.3721 4 

2AC21 :MMTA- Other- Hi!!h Early - Institutional 1 1.4308 4 

2AC31 :MMTA - Other- Hi!!h Early - Institutional 2 1.5740 4 

3AC11 :MMTA - Other- Hi!!h Late - Community 0 0.7815 2 

3AC21 :MMTA - Other- Hi!!h Late - Community 1 0.8402 2 

3AC31 :MMT A - Other - Hi!!h Late - Community 2 0.9834 2 

4AC11 :MMTA- Other- Hi!!h Late - Institutional 0 1.2846 3 

4AC21 :MMTA - Other- High Late - Institutional 1 1.3433 3 

4AC31 :MMTA - Other- Hi!!h Late - Institutional 2 1.4865 4 

lAAll :MMTA - Other - Low Early - Community 0 0.9381 3 

1AA21 :MMTA - Other- Low Early - Community 1 0.9968 3 

1AA31 :MMTA - Other - Low Early - Community 2 1.1400 3 

2AA11 :MMTA - Other- Low Early - Institutional 0 1.1576 3 

2AA21 :MMTA - Other- Low Early - Institutional 1 1.2163 3 

2AA31 :MMTA - Other - Low Early - Institutional 2 1.3595 4 

3AA11 :MMTA - Other- Low Late - Community 0 0.5670 2 

3AA21 :MMTA - Other - Low Late - Community 1 0.6257 2 3AA31 :MMTA - Other- Low Late - Community 2 0.7689 2 

4AA11 :MMTA-Other-Low Late - Institutional 0 1.0701 3 

4AA21 :MMTA - Other - Low Late - Institutional 1 1.1288 3 

4AA31 :MMTA-Other-Low Late - Institutional 2 1.2720 3 

lABll :MMTA - Other - Medium Early - Community 0 1.0409 4 

1AB21 :MMTA - Other - Medium Early - Community 1 1.0996 4 

1AB31 :MMTA - Other - Medium Early - Community 2 1.2428 3 

2AB11 :MMTA - Other - Medium Early - Institutional 0 1.2604 4 

2AB21 :MMTA - Other - Medium Early - Institutional 1 1.3191 4 

2AB31 :MMTA - Other - Medium Early - Institutional 2 1.4623 4 

3AB11 :MMTA - Other - Medium Late - Community 0 0.6698 2 

3AB21 :MMTA - Other - Medium Late - Community 1 0.7285 2 

3AB31 :MMTA - Other - Medium Late - Community 2 0.8717 2 

4AB11 :MMTA - Other - Medium Late - Institutional 0 1.1729 3 

4AB21 :MMTA - Other - Medium Late - Institutional 1 1.2316 3 

4AB31 :MMTA - Other - Medium Late - Institutional 2 1.3748 4 

lLCl 1 :MMT A - Respiratory - High Early - Community 0 1.1557 3 
37646 Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 


lotter on DSK11XQN23PROD with PROPOSALS2EP23JN22.044</GPH>

Comorbidity LUPA Visit 

Adjustment Proposed Threshold 

(0 = none, 1 = single Recalibrated (LUPAshave 

Admission Source and comorbidity, Weight for fewer visits than 

IDPPS Clinical Group and Functional Level Timin2 2 = interaction) 2023 the threshold) 

1LC21 :MMTA - Respiratory - High Early - Community 1 1.2144 3 

1LC31 :MMT A - Respiratory - High Early - Community 2 1.3576 2 

2LC11 :MMTA - Respiratoiy - High Early - Institutional 0 1.3752 4 

2LC21 :MMTA - Respiratory - High Early - Institutional 1 1.4339 4 

2LC31 :MMT A - Respiratory - High Early - Institutional 2 1.5771 4 

3LC11 :MMTA- Respiratoiy - High Late - Community 0 0.7846 2 

3LC21 :MMT A - Respiratory - High Late - Community 1 0.8433 2 

3LC31 :MMTA - Respiratory - High Late - Community 2 0.9865 2 

4LC11 :MMTA - Resoiratory - High Late - Institutional 0 1.2877 3 

4LC21 :MMT A - Respiratory - High Late - Institutional 1 1.3464 3 

4LC31 :MMTA- Respiratory - High Late - Institutional 2 1.4896 3 

lLAll :MMTA - Respiratory - Low Early - Community 0 0.9171 2 

1LA21 :MMTA - Respiratoiy - Low Early - Community 1 0.9757 2 

1LA31 :MMTA - Respiratory - Low Early - Community 2 1.1189 3 

2LA11 :MMTA - Respiratory - Low Early - Institutional 0 1.1365 3 

2LA21 :MMTA - Respiratoiy - Low Early - Institutional 1 1.1952 4 

2LA31 :MMTA - Respiratory - Low Early - Institutional 2 1.3384 4 

3LA11 :MMTA - Respiratory - Low Late - Community 0 0.5459 2 

3LA21 :MMTA - Resoiratory - Low Late - Community 1 0.6046 2 

3LA31 :MMTA - Respiratory - Low Late - Community 2 0.7478 2 

4LA11 :MMTA - Respiratory - Low Late - Institutional 0 1.0490 3 

4LA21 :MMTA - Respiratory - Low Late - Institutional 1 1.1077 3 

4LA31 :MMTA - Respiratory - Low Late - Institutional 2 1.2509 3 

lLBl 1 :MMTA - Respiratory - Medium Early - Community 0 1.0361 3 

1LB21 :MMTA - Respiratory - Medium Early - Community 1 1.0948 3 

1LB31 :MMTA - Respiratoiy - Medium Early - Community 2 1.2380 3 

2LB11 :MMTA - Respiratory - Medium Early - Institutional 0 1.2556 4 

2LB21 :MMTA - Respiratory - Medium Early - Institutional 1 1.3143 4 

2LB31 :MMTA - Resoiratory - Medium Early - Institutional 2 1.4575 4 

3LB11 :MMTA - Respiratory - Medium Late - Community 0 0.6650 2 

3LB21 :MMTA - Respiratory - Medium Late - Community 1 0.7237 2 

3LB31 :MMTA - Respiratory - Medium Late - Community 2 0.8669 2 

4LB11 :MMTA - Respiratory - Medium Late - Institutional 0 1.1681 3 

4LB21 :MMTA - Respiratory - Medium Late - Institutional 1 1.2268 3 

4LB31 :MMTA - Respiratory - Medium Late - Institutional 2 1.3700 4 

lGCll :MMTA - Surgical Aftercare - High Early - Community 0 1.1792 3 

1GC21 :MMTA - Surgical Aftercare - High Early - Community 1 1.2379 2 

1GC31 :MMTA - Surgical Aftercare - High Early - Community 2 1.3811 2 

2GC11 :MMTA - Surgical Aftercare - High Early - Institutional 0 1.3987 4 

2GC21 :MMTA - Surgical Aftercare - High Early - Institutional 1 1.4574 4 

2GC31 :MMTA - Surgical Aftercare - High Early - Institutional 2 1.6006 4 

3GC11 :MMTA - Surgical Aftercare - High Late - Community 0 0.8081 2 

3GC21 :MMTA - Surgical Aftercare - High Late - Community 1 0.8668 2 
Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 37647 


lotter on DSK11XQN23PROD with PROPOSALS2EP23JN22.045</GPH>

Comorbidity LUPA Visit 

Adjustment Proposed Threshold 

(0 = none, 1 = single Recalibrated (LUPAshave 

Admission Source and comorbidity, Weight for fewer visits than 

IDPPS Clinical Group and Functional Level Timin2 2 = interaction) 2023 the threshold) 

3GC31 :MMTA - Surgical Aftercare - High Late - Community 2 1.0100 2 

4GC11 :MMT A - Surgical Aftercare - High Late - Institutional 0 1.3112 4 

4GC21 :MMTA - Surgical Aftercare - High Late - Institutional 1 1.3699 4 

4GC31 :MMTA - Surgical Aftercare - High Late - Institutional 2 1.5131 4 

lGAll :MMTA - Surgical Aftercare - Low Early - Community 0 0.9214 2 

1GA21 :MMTA - Surgical Aftercare - Low Early - Community 1 0.9801 2 

1GA31 :MMTA - Surgical Aftercare - Low Early - Community 2 1.1233 2 

2GA11 :MMTA - Surgical Aftercare - Low Early - Institutional 0 1.1409 3 

2GA21 :MMTA - Surgical Aftercare - Low Early - Institutional 1 1.1996 4 

2GA31 :MMTA - Surgical Aftercare - Low Early - Institutional 2 1.3428 4 

3GA11 :MMTA - Surgical Aftercare - Low Late - Community 0 0.5503 2 

3GA21 :MMTA - Surgical Aftercare - Low Late - Community 1 0.6090 2 

3GA31 :MMTA - Surgical Aftercare - Low Late - Community 2 0.7522 2 

4GA11 :MMTA - Surgical Aftercare - Low Late - Institutional 0 1.0534 3 

4GA21 :MMT A - Surgical Aftercare - Low Late - Institutional 1 1.1121 3 

4GA31 :MMTA - Surgical Aftercare - Low Late - Institutional 2 1.2553 3 

lGBll :MMTA - Surgical Aftercare - Medium Early - Community 0 1.0361 2 

1GB21 :MMTA - Surgical Aftercare - Medium Early - Community 1 1.0948 2 

1GB31 :MMTA - Surgical Aftercare - Medium Early - Community 2 1.2380 2 

2GB11 :MMTA - Surgical Aftercare - Medium Early - Institutional 0 1.2555 4 

2GB21 :MMTA - Surgical Aftercare - Medium Early - Institutional 1 1.3142 4 

2GB31 :MMTA - Surgical Aftercare - Medium Early - Institutional 2 1.4574 4 

3GB11 :MMTA - Surgical Aftercare - Medium Late - Community 0 0.6649 2 

3GB21 :MMTA - Surgical Aftercare - Medium Late - Community 1 0.7236 2 

3GB31 :MMTA - Surgical Aftercare - Medium Late - Community 2 0.8668 2 

4GB11 :MMTA - Surgical Aftercare - Medium Late - Institutional 0 1.1681 3 

4GB21 :MMTA - Surgical Aftercare - Medium Late - Institutional 1 1.2268 3 

4GB31 :MMTA - Surgical Aftercare - Medium Late - Institutional 2 1.3700 4 

lECll MS Rehab-Hi!!h Early - Community 0 1.2330 5 

1EC21 MS Rehab - High Early - Community 1 1.2917 4 

1EC31 MS Rehab - High Early - Community 2 1.4349 4 

2EC11 MS Rehab - Hi!!h Early - Institutional 0 1.4525 5 

2EC21 MS Rehab - High Early - Institutional 1 1.5112 5 

2EC31 MS Rehab - Hi!!h Early - Institutional 2 1.6544 5 

3EC11 MS Rehab - Hi!!h Late - Community 0 0.8619 2 

3EC21 MS Rehab - High Late - Community 1 0.9206 2 

3EC31 MS Rehab - High Late - Community 2 1.0638 3 

4EC11 MS Rehab - Hi!!h Late - Institutional 0 1.3650 4 

4EC21 MS Rehab-Hi!!h Late - Institutional 1 1.4237 5 

4EC31 MS Rehab - High Late - Institutional 2 1.5669 5 

lEAll MS Rehab - Low Early - Community 0 1.0121 4 

1EA21 MS Rehab - Low Early - Community 1 1.0707 4 

1EA31 MS Rehab - Low Early - Community 2 1.2139 4 
37648 Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 


lotter on DSK11XQN23PROD with PROPOSALS2EP23JN22.046</GPH>

Comorbidity LUPA Visit 

Adjustment Proposed Threshold 

(0 = none, 1 = single Recalibrated (LUPAshave 

Admission Source and comorbidity, Weight for fewer visits than 

IDPPS Clinical Group and Functional Level Timin2 2 = interaction) 2023 the threshold) 

2EA11 MS Rehab - Low Early - Institutional 0 1.2315 5 

2EA21 MS Rehab - Low Early - Institutional 1 1.2902 5 

2EA31 MS Rehab - Low Early - Institutional 2 1.4334 5 

3EA11 MS Rehab - Low Late - Community 0 0.6409 2 

3EA21 MS Rehab - Low Late - Community 1 0.6996 2 

3EA31 MS Rehab - Low Late - Community 2 0.8428 2 

4EA11 MS Rehab - Low Late - Institutional 0 1.1440 4 

4EA21 MS Rehab - Low Late - Institutional 1 1.2027 4 4EA31 MS Rehab - Low Late - Institutional 2 1.3459 4 

lEBll MS Rehab - Medium Early - Community 0 1.0976 5 

1EB21 MS Rehab - Medium Early - Community 1 1.1563 4 1EB31 MS Rehab - Medium Early - Community 2 1.2995 4 

2EB11 MS Rehab - Medium Early - Institutional 0 1.3170 5 

2EB21 MS Rehab - Medium Early - Institutional 1 1.3757 5 

2EB31 MS Rehab - Medium Early - Institutional 2 1.5189 5 

3EB11 MS Rehab - Medium Late - Community 0 0.7264 2 

3EB21 MS Rehab - Medium Late - Community 1 0.7851 2 3EB31 MS Rehab - Medium Late - Community 2 0.9283 2 

4EB11 MS Rehab - Medium Late - Institutional 0 1.2296 4 

4EB21 MS Rehab - Medium Late - Institutional 1 1.2882 4 

4EB31 MS Rehab - Medium Late - Institutional 2 1.4314 4 

lBCll Neuro-High Early - Community 0 1.3585 4 

1BC21 Neuro-High Early - Community 1 1.4172 4 1BC31 Neuro-High Early - Community 2 1.5604 4 

2BC11 Neuro-High Early - Institutional 0 1.5780 5 

2BC21 Neuro-High Early - Institutional 1 1.6367 5 

2BC31 Neuro-High Early - Institutional 2 1.7799 4 

3BC11 Neuro-High Late - Community 0 0.9874 2 

3BC21 Neuro - High Late - Community 1 1.0461 3 

3BC31 Neuro-High Late - Community 2 1.1893 3 

4BC11 Neuro -High Late - Institutional 0 1.4905 4 

4BC21 Neuro-High Late - Institutional 1 1.5492 4 

4BC31 Neuro-High Late - Institutional 2 1.6924 4 

lBAll Neuro-Low Early - Community 0 1.0983 4 

1BA21 Neuro-Low Early - Community 1 1.1570 4 1BA31 Neuro-Low Early - Community 2 1.3002 4 

2BA11 Neuro-Low Early - Institutional 0 1.3178 4 

2BA21 Neuro-Low Early - Institutional 1 1.3765 4 

2BA31 Neuro-Low Early - Institutional 2 1.5197 5 

3BA11 Neuro-Low Late - Community 0 0.7272 2 

3BA21 Neuro-Low Late - Community 1 0.7859 2 

3BA31 Neuro-Low Late - Community 2 0.9291 2 

4BA11 Neuro -Low Late - Institutional 0 1.2303 4 
Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 37649 


lotter on DSK11XQN23PROD with PROPOSALS2EP23JN22.047</GPH>

Comorbidity LUPA Visit 

Adjustment Proposed Threshold 

(0 = none, 1 = single Recalibrated (LUPAshave 

Admission Source and comorbidity, Weight for fewer visits than 

IDPPS Clinical Group and Functional Level Timin2 2 = interaction) 2023 the threshold) 

4BA21 Neuro -Low Late - Institutional 1 1.2890 4 

4BA31 Neuro -Low Late - Institutional 2 1.4322 4 

lBBll Neuro - Medium Early - Community 0 1.2162 4 

1BB21 Neuro - Medium Early - Community 1 1.2749 4 

1BB31 Neuro - Medium Early - Community 2 1.4181 4 

2BB11 Neuro - Medium Early - Institutional 0 1.4356 5 

2BB21 Neuro - Medium Early - Institutional 1 1.4943 5 2BB31 Neuro - Medium Early - Institutional 2 1.6375 5 

3BB11 Neuro - Medium Late - Community 0 0.8450 2 

3BB21 Neuro - Medium Late - Community 1 0.9037 2 

3BB31 Neuro - Medium Late - Community 2 1.0469 2 

4BB11 Neuro - Medium Late - Institutional 0 1.3482 4 4BB21 Neuro - Medium Late - Institutional 1 1.4069 4 4BB31 Neuro - Medium Late - Institutional 2 1.5501 4 

lCCll Wound-Hi11:h Early - Community 0 1.5167 4 

1CC21 Wound-High Early - Community 1 1.5754 4 

1CC31 Wound - High Early - Community 2 1.7186 4 

2CC11 Wound-Hi11:h Early - Institutional 0 1.7361 5 

2CC21 Wound-Hi11:h Early - Institutional 1 1.7948 4 

2CC31 Wound - High Early - Institutional 2 1.9380 4 

3CC11 Wound-Hi11:h Late - Community 0 1.1455 3 

3CC21 Wound-Hi11:h Late - Community 1 1.2042 3 3CC31 Wound - High Late - Community 2 1.3474 3 

4CC11 Wound-High Late - Institutional 0 1.6486 4 

4CC21 Wound - High Late - Institutional 1 1.7073 4 4CC31 Wound-High Late - Institutional 2 1.8505 4 

lCAll Wound-Low Early - Community 0 1.2760 4 

1CA21 Wound-Low Early - Community 1 1.3347 4 1CA31 Wound-Low Early - Community 2 1.4779 4 

2CA11 Wound-Low Early - Institutional 0 1.4955 4 2CA21 Wound-Low Early - Institutional 1 1.5542 4 2CA31 Wound-Low Early - Institutional 2 1.6974 4 

3CA11 Wound-Low Late - Community 0 0.9049 2 

3CA21 Wound-Low Late - Community 1 0.9636 3 

3CA31 Wound-Low Late - Community 2 1.1068 3 

4CA11 Wound-Low Late - Institutional 0 1.4080 3 

4CA21 Wound-Low Late - Institutional 1 1.4667 4 

4CA31 Wound-Low Late - Institutional 2 1.6099 4 

lCBll Wound - Medium Early - Community 0 1.3861 4 

1CB21 Wound - Medium Early - Community 1 1.4448 4 1CB31 Wound - Medium Early - Community 2 1.5880 4 

2CB11 Wound - Medium Early - Institutional 0 1.6056 4 

2CB21 Wound - Medium Early - Institutional 1 1.6643 5 
37650 Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 

BILLING CODE 4120–01–C 

For CY 2023, there are 238 groups that 

experience a ¥5% to 0% change in 

case-mix weights and 183 groups that 

experience a 0% to +5% change in 

weights compared to their CY 2022 

case-mix weights. There are 10 groups 

that experience a change between +5% 

and +10% and one group that 

experiences a 10% to 12% increase in 

weights compared to the CY 2022 casemix weights. Changes to the PDGM 

case-mix weights are implemented in a 

budget neutral manner by multiplying 

the CY 2023 national standardized 30- 

day period payment rate by a case-mix 

budget neutrality factor. Typically, the 

case-mix weight budget neutrality factor 


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Comorbidity LUPA Visit 

Adjustment Proposed Threshold 

(0 = none, 1 = single Recalibrated (LUPAshave 

Admission Source and comorbidity, Weight for fewer visits than 

HIPPS Clinical Group and Functional Level Timin2 2 = interaction) 2023 the threshold) 

2CB31 Wound - Medium Early - Institutional 2 1.8075 5 

3CB11 Wound - Medium Late - Community 0 1.0150 3 3CB21 Wound - Medium Late - Community 1 1.0737 3 3CB31 Wound - Medium Late - Community 2 1.2169 3 

4CB11 Wound - Medium Late - Institutional 0 1.5181 4 

4CB21 Wound - Medium Late - Institutional 1 1.5768 4 

4CB31 Wound - Medium Late - Institutional 2 1.7200 4 

Source: CY 2021 Home Health Claims Data, Periods that end in CY 2021 accessed on the CCW March 21, 2022. 
Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 37651 

is also calculated using the most recent, 

complete home health claims data 

available. However, in the CY 2022 HH 

PPS proposed rule (86 FR 35908), due 

to the COVID–19 PHE, we discussed 

using the previous calendar year’s home 

health claims data (CY 2019) to 

determine if there were significant 

differences between utilizing CY 2019 

and CY 2020 claims data. We noted that 

CY 2020 was the first year of actual 

PDGM utilization data, therefore, if we 

were to use CY 2019 data due to the 

PHE we would need to simulate 30-day 

periods from 60-day episodes under the 

old system. We determined that using 

CY 2020 utilization data was more 

appropriate than using CY 2019 

utilization data, as it is actual PDGM 

utilization data. For CY 2023, we will 

continue the practice of using the most 

recent complete home health claims 

data at the time of rulemaking, which is 

CY 2021 data. The case-mix budget 

neutrality factor is calculated as the 

ratio of 30-day base payment rates such 

that total payments when the CY 2023 

PDGM case mix weights (developed 

using CY 2021 home health claims data) 

are applied to CY 2021 utilization 

(claims) data are equal to total payments 

when CY 2022 PDGM case-mix weights 

(developed using CY 2020 home health 

claims data) are applied to CY 2021 

utilization data. This produces a casemix budget neutrality factor for CY 2023 

of 0.9895. 

We invite comments on the CY 2023 

proposed case-mix weights and 

proposed case-mix weight budget 

neutrality factor. 

5. Proposed CY 2023 Home Health 

Payment Rate Updates 

a. Proposed CY 2023 Home Health 

Market Basket Update for HHAs 

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

requires that the standard prospective 

payment amounts for home health 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. In the CY 2019 HH PPS final 

rule with comment period (83 FR 

56425), we finalized a rebasing of the 

home health market basket to reflect 

2016 cost report data. A detailed 

description of how we rebased the HHA 

market basket is available in the CY 

2019 HH PPS final rule with comment 

period (83 FR 56425 through 56436). 

Section 1895(b)(3)(B) 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)), and CY 2020 (under section 

53110 of the Bipartisan Budget Act of 

2018 (BBA) (Pub. L. 115–123, enacted 

February 9, 2018)), 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 

changes 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 United States 

Department of Labor’s Bureau of Labor 

Statistics (BLS) publishes the official 

measures of productivity for the United 

States economy. We note that 

previously the productivity measure 

referenced in section 

1886(b)(3)(B)(xi)(II) was published by 

BLS as private nonfarm business 

multifactor productivity. Beginning 

with the November 18, 2021 release of 

productivity data, BLS replaced the 

term ‘‘multifactor productivity’’ with 

‘‘total factor productivity’’ (TFP). BLS 

noted that this is a change in 

terminology only and will not affect the 

data or methodology. As a result of the 

BLS name change, the productivity 

measure referenced in section 

1886(b)(3)(B)(xi)(II) of the Act is now 

published by BLS as ‘‘private nonfarm 

business total factor productivity’’. We 

refer readers to https://www.bls.gov for 

the BLS historical published TFP data. 

A complete description of IGI’s TFP 

projection methodology is available on 

the CMS website at https:// 

www.cms.gov/Research-Statistics-Dataand-Systems/Statistics-Trends-andReports/MedicareProgramRatesStats/ 

MarketBasketResearch. 

The proposed home health update 

percentage for CY 2023 is based on the 

estimated home health market basket 

update, specified at section 

1895(b)(3)(B)(iii) of the Act, of 3.3 

percent (based on IHS Global Inc.’s firstquarter 2022 forecast with historical 

data through fourth-quarter 2021). The 

estimated CY 2023 home health market 

basket update of 3.3 percent is then 

reduced by a productivity adjustment, 

as mandated by the section 3401 of the 

Patient Protection and Affordable Care 

Act (the Affordable Care Act) (Pub. L. 

111–148), currently estimated to be 0.4 

percentage point for CY 2023. In effect, 

the proposed home health payment 

update percentage for CY 2023 is a 2.9 

percent increase. 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 

2023, the home health payment update 

would be 0.9 percent (2.9 percent minus 

2 percentage points). If more recent data 

become available after the publication of 

this proposed rule and before the 

publication of the final rule (for 

example, more recent estimates of the 

home health market basket update and 

productivity adjustment), we would use 

such data, if appropriate, to determine 

the home health payment update 

percentage for CY 2023 in the final rule. 

b. CY 2023 Home Health Wage Index 

(1) Proposed CY 2023 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 home health 

services. Since the inception of the HH 

PPS, we have used inpatient hospital 

wage data in developing a wage index 

to be applied to home payments. We 

propose to continue this practice for CY 

2023, as we continue to believe that, in 

the absence of home health-specific 

wage data that accounts for area 

differences, using inpatient hospital 

wage data is appropriate and reasonable 

for the HH PPS. 

In the CY 2021 HH PPS final rule (85 

FR 70298), we finalized our proposal to 

adopt the revised Office of Management 

and Budget (OMB) delineations with a 

5-percent cap on wage index decreases, 

where the estimated reduction in a 

geographic area’s wage index would be 

capped at 5-percent in CY 2021 only, 

meaning no cap would be applied to 

wage index decreases for the second 

year (CY 2022). Therefore, we proposed 

and finalized the use of the FY 2022 

pre-floor, pre reclassified hospital wage 

index with no 5-percent cap on 

decreases as the CY 2022 wage 

adjustment to the labor portion of the 

HH PPS rates (86 FR 62285). For CY 

2023, we propose to base the HH PPS 

wage index on the FY 2023 hospital prefloor, pre-reclassified wage index for 

hospital cost reporting periods 

beginning on or after October 1, 2018, 

and before October 1, 2019 (FY 2019 

cost report data). The proposed CY 2023 

HH PPS wage index would not take into 


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37652 Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 

account any geographic reclassification 

of hospitals, including those in 

accordance with section 1886(d)(8)(B) or 

1886(d)(10) of the Act. We also propose 

that the CY 2023 HH PPS wage index 

would include a 5-percent cap on wage 

index decreases as discussed later in 

this section. If finalized, we will 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 

2023 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. The 

most recent wage index previously 

available for rural Puerto Rico is 0.4047, 

which is what we propose to use. 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 2023, the only urban 

area without inpatient hospital wage 

data is Hinesville, GA (CBSA 25980). 

Using the average wage index of all 

urban areas in Georgia as proxy, we 

propose the CY 2023 wage index value 

for Hinesville, GA to be 0.8535. 

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 OMB’s 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 2022 HH PPS 

wage index value for CBSA 46300, Twin 

Falls, Idaho, will be 0.8803. Bulletin No. 

17–01 is available at https:// 

www.whitehouse.gov/wp-content/ 

uploads/legacy_drupal_files/omb/ 

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

On April 10, 2018, OMB issued OMB 

Bulletin No. 18–03, which superseded 

the August 15, 2017 OMB Bulletin No. 

17–01. On September 14, 2018, OMB 

issued OMB Bulletin No. 18–04 which 

superseded the April 10, 2018, OMB 

Bulletin No. 18–03. These bulletins 

established revised delineations for 

Metropolitan Statistical Areas, 

Micropolitan Statistical Areas, and 

Combined Statistical Areas, and 

provided guidance on the use of the 

delineations of these statistical areas. A 

copy of OMB Bulletin No. 18–04 may be 

obtained at: https://www.bls.gov/bls/ 

omb-bulletin-18-04-reviseddelineations-of-metropolitan-statisticalareas.pdf. 

On March 6, 2020, OMB issued 

Bulletin No. 20–01, which provided 

updates to and superseded OMB 

Bulletin No. 18–04 that was issued on 

September 14, 2018. The attachments to 

OMB Bulletin No. 20–01 provided 

detailed information on the update to 

statistical areas since September 14, 

2018, and were based on the application 

of the 2010 Standards for Delineating 

Metropolitan and Micropolitan 

Statistical Areas to Census Bureau 

population estimates for July 1, 2017, 

and July 1, 2018. (For a copy of this 

bulletin, we refer readers to https:// 

www.whitehouse.gov/wp-content/ 

uploads/2020/03/Bulletin-20-01.pdf.) In 

OMB Bulletin No. 20–01, OMB 

announced one new Micropolitan 

Statistical Area, one new component of 

an existing Combined Statistical Are 

and changes to New England City and 

Town Area (NECTA) delineations. In 

the CY 2021 HH PPS final rule (85 FR 

70298) we stated that if appropriate, we 

would propose any updates from OMB 

Bulletin No. 20–01 in future 

rulemaking. After reviewing OMB 

Bulletin No. 20–01, we have determined 

that the changes in Bulletin 20–01 

encompassed delineation changes that 

would not affect the Medicare home 

health wage index for CY 2022. 

Specifically, the updates consisted of 

changes to NECTA delineations and the 

re-designation of a single rural county 

into a newly created Micropolitan 

Statistical Area. The Medicare home 

health wage index does not utilize 

NECTA definitions, and, as most 

recently discussed in the CY 2021 HH 

PPS final rule (85 FR 70298) we include 

hospitals located in Micropolitan 

Statistical areas in each State’s rural 

wage index. In other words, these OMB 

updates did not affect any geographic 

areas for purposes of the wage index 

calculation for CY 2022. 

The proposed CY 2023 wage index is 

available on the CMS website at: https:// 

www.cms.gov/Center/Provider-Type/ 

Home-Health-Agency-HHA-Center. 

(2) Proposed Permanent Cap on Wage 

Index Decreases 

As discussed in section II.B.5.b.1 of 

this proposed rule, we have proposed 

and finalized temporary transition 

policies in the past to mitigate 

significant changes to payments due to 

changes to the home health wage index. 

Specifically, in the CY 2015 HH PPS 

final rule (79 FR 66086), we 

implemented a 50/50 blend for all 

geographic areas consisting of the wage 

index values using the then-current 

OMB area delineations and the wage 

index values using OMB’s new area 

delineations based on OMB Bulletin No. 

13–01. In the CY 2021 HH PPS final rule 

(85 FR 73100), we adopted the revised 

OMB delineations with a 5-percent cap 

on wage index decreases, where the 

estimated reduction in a geographic 

area’s wage index would be capped at 

5-percent in CY 2021. We explained that 

we believed the 5-percent cap would 

provide greater transparency and would 

be administratively less complex than 

the prior methodology of applying a 50/ 

50 blended wage index. We noted that 

this transition approach struck an 

appropriate balance by providing a 

transition period to mitigate the 

resulting short-term instability and 

negative impacts on providers and time 

for them to adjust to their new labor 

market area delineations and wage 

index values. 

In the CY 2022 HH PPS final rule (86 

FR 62285), a few commenters stated that 

providers should be protected against 

substantial payment reductions due to 

dramatic reductions in wage index 

values from one year to the next. 

Because we did not propose any 

transition policy in the CY 2022 

proposed rule, we did not extend the 

transition period for CY 2022. In the CY 

2022 HH PPS final rule, we stated that 

we continued to believe that applying 

the 5-percent cap transition policy in 

year one provided an adequate 

safeguard against any significant 

payment reductions associated with the 

adoption of the revised CBSA 

delineations in CY 2021, allowed for 

sufficient time to make operational 


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changes for future calendar years, and 

provided a reasonable balance between 

mitigating some short-term instability in 

home health payments and improving 

the accuracy of the payment adjustment 

for differences in area wage levels. 

However, we acknowledged that certain 

changes to wage index policy may 

significantly affect Medicare payments. 

In addition, we reiterated that our 

policy principles with regard to the 

wage index include generally using the 

most current data and information 

available and providing that data and 

information, as well as any approaches 

to addressing any significant effects on 

Medicare payments resulting from these 

potential scenarios, in notice and 

comment rulemaking. With these policy 

principles in mind, we considered for 

this CY 2023 HH PPS proposed rule 

how best to address the potential 

scenarios, which commenters raised 

concerns; that is, scenarios in which 

changes to wage index policy may 

significantly affect Medicare home 

health payments. 

In the past, we have established 

transition policies of limited duration to 

phase in significant changes to labor 

market areas. In taking this approach in 

the past, we sought to mitigate shortterm instability and fluctuations that 

can negatively impact providers due to 

wage index changes. Sections 

1895(b)(4)(A)(ii) and (b)(4)(C) of the Act 

requires 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 home health 

services. We have previously stated that, 

because the wage index is a relative 

measure of the value of labor in 

prescribed labor market areas, we 

believe it is important to implement 

new labor market area delineations with 

as minimal a transition as is reasonably 

possible. However, we recognize that 

changes to the wage index have the 

potential to create instability and 

significant negative impacts on certain 

providers even when labor market areas 

do not change. In addition, year-to-year 

fluctuations in an area’s wage index can 

occur due to external factors beyond a 

provider’s control, such as the COVID– 

19 PHE, and for an individual provider, 

these fluctuations can be difficult to 

predict. We also recognize that 

predictability in Medicare payments is 

important to enable providers to budget 

and plan their operations. 

In light of these considerations, we 

are proposing a permanent approach to 

smooth year-to-year changes in 

providers’ wage indexes. We are 

proposing a policy that increases the 

predictability of home health payments 

for providers and mitigates instability 

and significant negative impacts to 

providers resulting from changes to the 

wage index. 

As previously discussed, we believe 

that applying a 5-percent cap on wage 

index decreases for CY 2021 provided 

greater transparency and was 

administratively less complex than prior 

transition methodologies. In addition, 

we believe this methodology mitigates 

short-term instability and fluctuations 

that can negatively impact providers 

due to wage index changes. Lastly, we 

note that we believe the 5-percent cap 

we applied to all wage index decreases 

for CY 2021 provided an adequate 

safeguard against significant payment 

reductions related to the adoption of the 

revised CBSAs. However, as discussed 

earlier in this section of this proposed 

rule, we recognize there are 

circumstances that a one-year mitigation 

policy would not effectively address 

future years in which providers 

continue to be negatively affected by 

significant wage index decreases. 

Typical year-to-year variation in the 

home health wage index has historically 

been within 5-percent, and we expect 

this will continue to be the case in 

future years. Therefore, we believe that 

applying a 5-percent cap on all wage 

index decreases in future years, 

regardless of the reason for the decrease, 

would effectively mitigate instability in 

home health payments due to any 

significant wage index decreases that 

may affect providers in any year that 

commenters raised in the CY 2022 HH 

PPS final rule. Additionally, we believe 

that applying a 5-percent cap on all 

wage index decreases would increase 

the predictability of home health 

payments for providers, enabling them 

to more effectively budget and plan 

their operations. Lastly, we believe that 

applying a 5-percent cap on all wage 

index decreases, from the prior year, 

would have a small overall impact on 

the labor market area wage index 

system. As discussed in further detail in 

section VII.C. of this proposed rule, we 

estimate that applying a 5-percent cap 

on all wage index decreases, from the 

prior year, will have a very small effect 

on the wage index budget neutrality 

factors for CY 2023. Because the wage 

index is a measure of the value of labor 

(wage and wage-related costs) in a 

prescribed labor market area relative to 

the national average, we anticipate that 

most providers will not experience yearto-year wage index declines greater than 

5-percent in any given year. We believe 

that applying a 5-percent cap on all 

wage index decreases, from the prior 

year, would continue to maintain the 

accuracy of the overall labor market area 

wage index system. 

Therefore, for CY 2023 and 

subsequent years, we are proposing to 

apply a permanent 5 percent cap on any 

decrease to a geographic area’s wage 

index from its wage index in the prior 

year, regardless of the circumstances 

causing the decline. That is, we are 

proposing that a geographic area’s wage 

index for CY 2023 would not be less 

than 95 percent of its final wage index 

for CY 2022, regardless of whether the 

geographic area is part of an updated 

CBSA, and that for subsequent years, a 

geographic area’s wage index would not 

be less than 95 percent of its wage index 

calculated in the prior CY. We further 

propose that if a geographic area’s prior 

CY wage index is calculated based on 

the 5-percent cap, then the following 

year’s wage index would not be less 

than 95 percent of the geographic area’s 

capped wage index. For example, if a 

geographic area’s wage index for CY 

2023 is calculated with the application 

of the 5-percent cap, then its wage index 

for CY 2024 would not be less than 95 

percent of its capped wage index in CY 

2023. Likewise, we are proposing to 

make the corresponding regulations text 

changes at § 484.220(c) as follows: 

Beginning on January 1, 2023, CMS will 

apply a cap on decreases to the home 

health wage index such that the wage 

index applied to a geographic area is not 

less than 95 percent of the wage index 

applied to that geographic area in the 

prior CY. This 5-percent cap on negative 

wage index changes would be 

implemented in a budget neutral 

manner through the use of wage index 

budget neutrality factors. 

In section VII.C. of this proposed rule, 

we estimate the impact to payments for 

providers in CY 2023 based on this 

proposed policy. We also note that we 

would examine the effects of this policy 

on an ongoing basis in the future in 

order to assess its appropriateness. 

c. CY 2023 Annual Payment Update 

(1) Background 

The 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 HH PPS 

was a national, standardized 60-day 

episode payment rate. As finalized in 

the CY 2019 HH PPS final rule with 

comment period (83 FR 56406), and as 

described in the CY 2020 HH PPS final 

rule with comment period (84 FR 

60478), the unit of home health 

payment changed from a 60-day episode 

to a 30-day period effective for those 30- 


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37654 Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 

day periods beginning on or after 

January 1, 2020. 

As set forth in § 484.220, we adjust 

the national, standardized prospective 

payment rates 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. In the 

CY 2019 HH PPS final rule with 

comment period (83 FR 56435), we 

finalized rebasing the home health 

market basket to reflect 2016 Medicare 

cost report data. We also finalized a 

revision to the labor share to reflect the 

2016-based home health market basket 

compensation (Wages and Salaries plus 

Benefits) cost weight. We finalized that 

for CY 2019 and subsequent years, the 

labor share would be 76.1 percent and 

the non-labor share would be 23.9 

percent. The following are the steps we 

take to compute the case-mix and wageadjusted 30-day period payment amount 

for CY 2023: 

• Multiply the national, standardized 

30-day period 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 30-day period 

payment amount, subject to any 

additional applicable adjustments. 

We provide annual updates of the HH 

PPS rate in accordance with section 

1895(b)(3)(B) of the Act. Section 484.225 

sets forth the specific annual percentage 

update methodology. In accordance 

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

and § 484.225(i), for an HHA that does 

not submit home health quality data, as 

specified by the Secretary, the 

unadjusted national prospective 30-day 

period rate is equal to the rate for the 

previous calendar year increased by the 

applicable home health payment 

update, 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. 

The final claim that the HHA submits 

for payment determines the total 

payment amount for the period and 

whether we make an applicable 

adjustment to the 30-day case-mix and 

wage-adjusted payment amount. The 

end date of the 30-day period, as 

reported on the claim, determines 

which calendar year rates Medicare will 

use to pay the claim. 

We may adjust a 30-day case-mix and 

wage-adjusted payment based on the 

information submitted on the claim to 

reflect the following: 

• A LUPA is provided on a per-visit 

basis as set forth in §§ 484.205(d)(1) and 

484.230. 

• A PEP adjustment as set forth in 

§§ 484.205(d)(2) and 484.235. 

• An outlier payment as set forth in 

§§ 484.205(d)(3) and 484.240. 

(2) CY 2023 National, Standardized 30- 

Day Period Payment Amount 

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

requires that the standard prospective 

payment 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 2023 

national, standardized 30-day period 

payment rate, we apply a permanent 

behavioral adjustment factor, a case-mix 

weights recalibration budget neutrality 

factor, a wage index budget neutrality 

factor and the home health payment 

update percentage discussed in section 

II.C.2. of this proposed rule. As 

discussed in section II.B.2.f. of this 

proposed rule, we are implementing a 

permanent behavior adjustment of 

¥7.69 percent to prevent further 

overpayments. The permanent behavior 

adjustment factor is 0.9231 (1¥0.0769). 

As discussed previously, to ensure the 

changes to the PDGM case-mix weights 

are implemented in a budget neutral 

manner, we apply a case-mix weights 

budget neutrality factor to the CY 2022 

national, standardized 30-day period 

payment rate. The proposed case-mix 

weights budget neutrality factor for CY 

2023 is 0.9895. Additionally, we also 

apply a wage index budget neutrality to 

ensure that wage index updates and 

revisions are implemented in a budget 

neutral manner. Typically, the wage 

index budget neutrality factor is 

calculated using the most recent, 

complete home health claims data 

available. However, in the CY 2022 HH 

PPS final rule due to the COVID–19 

PHE, we looked at using the previous 

calendar year’s home health claims data 

(CY 2019) to determine if there were 

significant differences between utilizing 

2019 and 2020 claims data. Our analysis 

showed that there was only a small 

difference between the wage index 

budget neutrality factors calculated 

using CY 2019 and CY 2020 home 

health claims data. Therefore, for CY 

2022 we decided to continue our 

practice of using the most recent, 

complete home health claims data 

available; that is, we used CY 2020 

claims data for the CY 2022 payment 

rate updates. For CY 2023 rate setting, 

we do not anticipate significant 

differences between using pre COVID– 

19 PHE data (CY 2019 claims) and the 

most recent claims data at the time of 

rulemaking (CY 2021 claims). Therefore, 

we will continue our practice of using 

the most recent, complete utilization 

data at the time of rulemaking; that is, 

we are using CY 2021 claims data for CY 

2023 payment rate updates. 

To calculate the wage index budget 

neutrality factor, we first determine the 

payment rate needed for non-LUPA 30- 

day periods using the CY 2023 wage 

index so those total payments are 

equivalent to the total payments for 

non-LUPA 30-day periods using the CY 

2022 wage index and the CY 2022 

national standardized 30-day period 

payment rate adjusted by the case-mix 

weights recalibration neutrality factor. 

Then, by dividing the payment rate for 

non-LUPA 30-day periods using the CY 

2023 wage index with a 5-percent cap 

on wage index decreases by the 

payment rate for non-LUPA 30-day 

periods using the CY 2022 wage index, 

we obtain a wage index budget 

neutrality factor of 0.9975. We then 

apply the wage index budget neutrality 

factor of 0.9975 to the 30-day period 

payment rate. 

Next, we would update the 30-day 

period payment rate by the CY 2023 

home health payment update percentage 

of 2.9 percent. The CY 2023 national, 

standardized 30-day period payment 

rate is calculated in Table B27. 


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The CY 2023 national, standardized 

30-day period payment rate for a HHA 

that does not submit the required 

quality data is updated by the CY 2023 

home health payment update of 2.9 

percent minus 2 percentage points and 

is shown in Table B28. 

(3) CY 2023 National Per-Visit Rates for 

30-Day Periods of Care 

The national per-visit rates are used to 

pay LUPAs 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 2023 national pervisit rates, we started with the CY 2022 

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 30- 

day periods of care using the CY 2023 

wage index with a 5-percent cap on 

wage index decreases and comparing it 

to simulated total payments for LUPA 

30-day periods of care using the CY 

2022 wage index (with no 5-percent 

cap). By dividing the total payments for 

LUPA 30-day periods of care using the 

CY 2023 wage index by the total 

payments for LUPA 30-day periods of 

care using the CY 2022 wage index, we 

obtained a wage index budget neutrality 

factor of 0.9992. We apply the wage 

index budget neutrality factor in order 

to calculate the CY 2022 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. 

Additionally, we are not applying the 

permanent adjustment to the per visit 

payment rates but only the case-mix 

adjusted payment rate. Lastly, the pervisit rates for each discipline are 

updated by the CY 2023 home health 

payment update percentage of 2.9 

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 add-on 

payment amount, which is paid for 

episodes that occur as the only episode 

or initial episode in a sequence of 

adjacent episodes. The CY 2023 national 

per visit rates for HHAs that submit the 

required quality data are updated by the 

CY 2023 home health payment update 

percentage of 2.9 percent and are shown 

in Table B29. 


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TABLE B27: CY 2023 NATIONAL, STANDARDIZED 30-DAY PERIOD PAYMENT 

AMOUNT 

CY 2022 Permanent Case-Mix Wage CY2023 CY 2023 

National BA Weights Index HH National, 

Standardized Adjustment Budget Budget Payment Standardized 

30-Day Period Factor Neutrality Neutrality Update 30-Day Period 

Payment Factor Factor Payment 

$2,031.64 0.9231 0.9895 0.9975 1.029 $L904.76 

TABLE B28: CY 2023 NATIONAL, STANDARDIZED 30-DAY PERIOD PAYMENT 

AMOUNT FOR HHAS THAT DO NOT SUBMIT THE QUALITY DATA 

CY 2022 Permanent Case-Mix Wage CY2023HH CY 2023 

National BA Weights Index Payment National, 

Standardized Adjustment Budget Budget Update Standardized 

30-Day Factor Neutrality Neutrality Minus 2 30-Day 

Period Factor Factor Percentage Period 

Payment Points Payment 

$2,031.64 0.9231 0.9895 0.9975 1.009 $1,867.74 
37656 Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 

The CY 2023 per-visit payment rates 

for HHAs that do not submit the 

required quality data are updated by the 

CY 2023 home health payment update 

percentage of 2.9 percent minus 2 

percentage points and are shown in 

Table B30. 

(4) LUPA Add-On Factors 

Prior to the implementation of the 30- 

day unit of payment, LUPA episodes 

were eligible for a LUPA add-on 

payment if the episode of care was the 

first or only episode in a sequence of 

adjacent episodes. As stated in the CY 

2008 HH PPS final rule, the average visit 

lengths in these initial LUPAs are 16 to 

18 percent higher than the average visit 

lengths in initial non-LUPA 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. 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. 

In the CY 2019 HH PPS final rule with 

comment period (83 FR 56440), in 

addition to finalizing a 30-day unit of 

payment, we finalized our policy of 

continuing to multiply the per-visit 

payment amount for the first skilled 

nursing, physical therapy, or speechlanguage pathology visit in LUPA 

periods that occur as the only period of 

care or the initial 30-day period of care 

in a sequence of adjacent 30-day periods 

of care by the appropriate add-on factor 

(1.8451 for SN, 1.6700 for PT, and 

1.6266 for SLP) to determine the LUPA 

add-on payment amount for 30-day 

periods of care under the PDGM. For 

example, using the proposed CY 2023 

per-visit payment rates for HHAs that 

submit the required quality data, for 

LUPA periods that occur as the only 

period or an initial period in a sequence 

of adjacent periods, if the first skilled 

visit is SN, the payment for that visit 

would be $297.65 (1.8451 multiplied by 

$161.32), subject to area wage 

adjustment. 

(5) Occupational Therapy LUPA AddOn Factor 

In order to implement Division CC, 

section 115, of CAA 2021, CMS 

finalized changes to regulations at 

§ 484.55(a)(2) and (b)(3) that allowed 

occupational therapists to conduct 

initial and comprehensive assessments 

for all Medicare beneficiaries under the 

home health benefit when the plan of 

care does not initially include skilled 

nursing care, but either PT or SLP (86 

FR 62351). This change, led to us 


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TABLE B29: CY 2023 NATIONAL PER-VISIT PAYMENT AMOUNTS 

Wage Index 

CY 2022 Per- Budget CY2023HH CY 2023 PerVisit Payment Neutrality Payment Visit Payment 

HH Discipline Amount Factor Update Amount 

Home Health Aide $71.04 0.9992 1.029 $73.04 

Medical Social Services $251.48 0.9992 1.029 $258.57 

Occupational Therapy $172.67 0.9992 1.029 $177.54 

Physical Therapy $171.49 0.9992 1.029 $176.32 

Skilled Nursing $156.90 0.9992 1.029 $161.32 

Speech-Lamruage Patholo£!V $186.41 0.9992 1.029 $191.66 

TABLE B30: CY 2023 NATIONAL PER-VISIT PAYMENT AMOUNTS 

FOR HHAS THAT DO NOT SUBMIT THE REQUIRED QUALITY DATA 

CY2022HH CY2023 

Wage Index Payment National, 

CY 2022 Per- Budget Update Minus Standardized 

Visit Payment Neutrality 2 Percentage 30-Day Period 

HH Discipline Amount Factor Points Payment 

Home Health Aide $71.04 0.9992 1.009 $71.62 

Medical Social Services $251.48 0.9992 1.009 $253.54 

Occupational Therapy $172.67 0.9992 1.009 $174.08 

Physical Therapy $171.49 0.9992 1.009 $172.89 

Skilled Nursing $156.90 0.9992 1.009 $158.19 

Speech-Language Patholo£!V $186.41 0.9992 1.009 $187.94 
Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 37657 

establishing a LUPA add-on factor for 

calculating the LUPA add-on payment 

amount for the first skilled occupational 

therapy (OT) visit in LUPA periods that 

occurs as the only period of care or the 

initial 30-day period of care in a 

sequence of adjacent 30-day periods of 

care. 

As stated in the CY 2022 HH PPS final 

rule with comment period (86 FR 

62289) since there was not sufficient 

data regarding the average excess of 

minutes for the first visit in LUPA 

periods when the initial and 

comprehensive assessments are 

conducted by occupational therapists 

we finalized the use of the PT LUPA 

add-on factor of 1.6700 as a proxy. We 

also stated that we would use the PT 

LUPA add-on factor as a proxy until we 

have CY 2022 data to establish a more 

accurate OT add-on factor for the LUPA 

add-on payment amounts (86 FR 62289). 

Therefore, we continue to believe the 

similarity in the per-visit payment rates 

for both PT and OT make the PT LUPA 

add-on factor the most appropriate 

proxy until we have CY 2022 data to 

propose a LUPA add-on factor specific 

to OT in future rulemaking. 

d. 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 and 

the previous unit of payment (that is, 

60-day episodes), outlier payments were 

made for 60-day episodes whose 

estimated costs exceed a threshold 

amount for each HHRG. The episode’s 

estimated cost was established as the 

sum of the national wage-adjusted per 

visit payment amounts delivered during 

the episode. The outlier threshold for 

each case-mix group or PEP adjustment 

defined as the 60-day episode payment 

or PEP adjustment for that group plus a 

fixed-dollar loss (FDL) amount. For the 

purposes of the HH PPS, the FDL 

amount is calculated by multiplying the 

home health FDL ratio by a case’s wageadjusted 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 that surpasses 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 to require that the Secretary 

reduce the HH PPS payment rates such 

that aggregate HH PPS payments were 

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 revised 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 for each year at 10 percent. 

As such, beginning in CY 2011, we 

reduced payment rates by 5 percent and 

targeted 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 

targeted 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 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 costper-unit approach rather than a cost-pervisit 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 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-perunit 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. 

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, the per unit rates used to 

estimate an episode’s cost were 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 

cost-per-unit used to determine the cost 

of an episode of care (81 FR 76727). We 

will continue to monitor the visit length 

by discipline as more recent data 

becomes available, and may propose to 

update the rates as needed in the future. 

In the CY 2019 HH PPS final rule with 

comment period (83 FR 56521), we 

finalized a policy to maintain the 

current methodology for payment of 

high-cost outliers upon implementation 

of PDGM beginning in CY 2020 and 

calculated payment for high-cost 

outliers based upon 30-day period of 

care. Upon implementation of the 

PDGM and 30-day unit of payment, we 

finalized the FDL ratio of 0.56 for 30- 

day periods of care in CY 2020. Given 

that CY 2020 was the first year of the 

PDGM and the change to a 30-day unit 

of payment, we finalized to maintain the 

same FDL ratio of 0.56 in CY 2021 as we 

did not have sufficient CY 2020 data at 

the time of CY 2021 rulemaking to 

proposed a change to the FDL ratio for 

CY 2021. In the CY 2022 HH PPS final 

rule with comment period (86 FR 

62292), we estimated that outlier 

payments would be approximately 1.8 

percent of total HH PPS final rule 

payments if we maintained an FDL of 

0.56 in CY 2022. Therefore, in order to 


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37658 Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 

18Found in Ch47 of the Provider Reimbursement 

Manual at https://www.cms.gov/Regulations-andGuidance/Guidance/Manuals/Paper-BasedManuals-Items/CMS021935. 

19Medicare Payment Advisory Commission 

(MedPAC), Report to the Congress: Medicare 

Payment Policy. March 2022, P. 271. found at 

https://www.medpac.gov/wp-content/uploads/ 

pay up to, but no more than, 2.5 percent 

of total payments as outlier payments 

we finalized an FDL of 0.40 for CY 2022. 

(2) FDL Ratio for CY 2023 

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 periods that can receive 

outlier payments, but makes it possible 

to select a higher loss-sharing ratio, and 

therefore, increase outlier payments for 

qualifying outlier periods. Alternatively, 

a lower FDL ratio means that more 

periods can qualify for outlier 

payments, but outlier payments per 

period must be lower. 

The FDL ratio and the loss-sharing 

ratio are 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 

that exceed the outlier threshold 

amount. Using CY 2021 claims data (as 

of March 21, 2022) and given the 

statutory requirement that total outlier 

payments do not exceed 2.5 percent of 

the total payments estimated to be made 

under the HH PPS, we are proposing an 

FDL ratio of 0.44 for CY 2023. CMS will 

update the FDL, if needed, once we 

have more complete CY 2021 claims 

data. 

K. Comment Solicitation on the 

Collection of Data on the Use of 

Telecommunications Technology Under 

the Medicare Home Health Benefit 

Even prior to the COVID–19 PHE, 

CMS acknowledged the importance of 

technology in allowing HHAs the 

flexibility of furnishing services 

remotely. In the CY 2019 HH PPS final 

rule with comment (83 FR 56406), for 

purposes of the Medicare home health 

benefit, we finalized the definition of 

‘‘remote patient monitoring’’ in 

regulation at 42 CFR 409.46(e) as the 

collection of physiologic data (for 

example, electrocardiogram (ECG), 

blood pressure, glucose monitoring) 

digitally stored and/or transmitted by 

the patient and/or caregiver to the HHA. 

In the CY 2019 HH PPS final rule with 

comment, we also finalized in 

regulation at § 409.46(e) that the costs of 

remote patient monitoring are 

considered allowable administrative 

costs (operating expenses) if remote 

patient monitoring is used by the HHA 

to augment the care planning process 

(83 FR 56527). 

With the declaration of the COVID–19 

PHE in early 2020, the use of 

telecommunications technology has 

become more prominent in the delivery 

of healthcare in the United States. 

Anecdotally, many beneficiaries 

preferred to stay home than go to 

physician’s offices and outpatient 

centers to seek care, while also limiting 

the number and frequency of care 

providers furnishing services inside 

their homes to avoid exposure to 

COVID–19. Accordingly, CMS 

implemented additional policies under 

the HH PPS to make providing and 

receiving services via 

telecommunications technology easier. 

In the first COVID–19 PHE interim final 

rule with comment period (IFC) (85 FR 

19230), we changed the plan of care 

requirements at § 409.43(a) on an 

interim basis, for the purposes of 

Medicare payment, to state that the plan 

of care must include any provision of 

remote patient monitoring or other 

services furnished via a 

telecommunications system. The plan of 

care must also describe how the use of 

such technology is tied to the patientspecific needs as identified in the 

comprehensive assessment and will 

help to achieve the goals outlined on the 

plan of care. The amended plan of care 

requirements at § 409.43(a) also state 

that these services cannot substitute for 

a home visit ordered as part of the plan 

of care and cannot be considered a 

home visit for the purposes of patient 

eligibility or payment, in accordance 

with section 1895(e)(1)(A) and (B) of the 

Act. The CY 2021 HH PPS final rule 

with comment period (85 FR 70298) 

finalized these changes on a permanent 

basis, as well as amended § 409.46(e) to 

include not only remote patient 

monitoring, but other communication or 

monitoring services consistent with the 

plan of care for the individual, on the 

home health cost report as allowable 

administrative costs. 

Sections 1895(e)(1)(A) and (B) of the 

Act specify that telecommunications 

services cannot substitute for in-person 

home health services ordered as part of 

the plan of care certified by a physician 

and are not considered a home health 

visit for purposes of eligibility or 

payment under Medicare. Though the 

use of telecommunications technology 

is not to be used as a substitute for inperson home health services, as ordered 

on the plan of care, and services 

provided through the use of 

telecommunications technology (rather 

than in-person) are not considered a 

home health visit, anecdotally we have 

heard that HHAs are using 

telecommunication services during the 

course of a 30-day period of care and as 

a result of the COVID–19 PHE, as 

described previously. In the first 

COVID–19 PHE IFC, we provided an 

example describing a situation where 

the use of technology is not a substitute 

for the provision of in-person visits as 

ordered on the plan of care, rather the 

plan of care is updated to reflect a 

change in the frequency of the in-person 

visits and to include ‘‘virtual visits’’ as 

part of the management of the home 

health patient (85 FR 19248). 

Currently, the collection of data on 

the use of telecommunications 

technology is limited to overall cost data 

on a broad category of 

telecommunications services as a part of 

an HHA’s administrative costs on line 5 

of the HHA Medicare cost reports.18 As 

we noted in the CY 2019 HH PPS 

proposed rule, these costs would then 

be factored into the costs per visit. 

Factoring the costs associated with 

telecommunications systems into the 

costs per visit has important 

implications for assessing home health 

costs relevant to payment, including 

HHA Medicare margin calculations (83 

FR 32426). Data on the use of 

telecommunications technology during 

a 30-day period of care at the 

beneficiary level is not currently 

collected on the home health claim. 

While the provision of services 

furnished via a telecommunications 

system must be included on the 

patient’s plan of care, CMS does not 

routinely review plans of care to 

determine the extent to which these 

services are actually being furnished. 

Collecting data on the use of 

telecommunications technology on 

home health claims would allow CMS 

to analyze the characteristics of the 

beneficiaries utilizing services furnished 

remotely, and will give us a broader 

understanding of the social 

determinants that affect who benefits 

most from these services, including 

what barriers may potentially exist for 

certain subsets of beneficiaries. 

Furthermore, in their March 2022 

Report to the Congress: Medicare’s 

Payment Policy, MedPAC recommended 

tracking the use of telehealth in the 

home health care benefit on home 

health claims in order to improve 

payment accuracy.19 As such, to collect 


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SEC.pdf. 

more complete data on the use of 

telecommunications technology in the 

provision of home health services, we 

are soliciting comments on the 

collection of such data on home health 

claims, which we aim to begin 

collecting by January 1, 2023 on a 

voluntary basis by HHAs, and will begin 

to require this information be reported 

on claims by July of 2023. Specifically, 

we are soliciting comments on the use 

of three new G-codes identifying when 

home health services are furnished 

using synchronous telemedicine 

rendered via a real-time two-way audio 

and video telecommunications system; 

synchronous telemedicine rendered via 

telephone or other real-time interactive 

audio-only telecommunications system; 

and the collection of physiologic data 

digitally stored and/or transmitted by 

the patient to the home health agency, 

that is, remote patient monitoring. We 

would capture the utilization of remote 

patient monitoring through the 

inclusion of the start date of the remote 

patient monitoring and the number of 

units indicated on the claim. This may 

help us understand in general how long 

remote monitoring is used for 

individual patients and for which 

conditions. Although we plan to begin 

collecting this information beginning 

with these three G-codes on January 1, 

2023, we are interested in comments on 

whether there are other common uses of 

telecommunications technology under 

the home health benefit that would 

warrant additional G-codes that would 

be helpful in tracking the use of such 

technology in the provision of care. 

In accordance with section 40.2 in 

Chapter 10 of the Medicare Claims 

Processing Manual (Pub. 100–04), we 

plan to issue instructions that these 

forthcoming G-codes are to be used to 

report services in line item detail and 

each service must be reported as a 

separate line under the appropriate 

revenue code (04x—Physical Therapy, 

043x—Occupational Therapy, 044x— 

Speech-Language Pathology, 055x— 

Skilled Nursing, 056x—Medical Social 

Services, or 057x—Home Health Aide). 

While we do not plan on limiting the 

use of these G-codes to any particular 

discipline, we would not anticipate use 

of such technology would be reported 

under certain revenue codes such as 

027x or 0623—Medical Supplies, or 

revenue code 057x—Home Health Aide. 

We are interested in comments from the 

public on our belief that, due to the 

hands-on nature of home health aide 

services, the use of telecommunications 

technology would generally not be 

appropriate for such services. We 

remind interested parties that if there is 

a service that cannot be provided 

through telecommunications technology 

(for example, wound care that requires 

in-person, hands-on care from a skilled 

nurse), the HHA must make an inperson visit to furnish such services (85 

FR 39428). We are also requesting 

comments regarding the appropriateness 

of such technology for particular 

services in order to more clearly 

delineate when the use of such 

technology is appropriate. This may 

help inform how we use this analysis, 

for instance, connecting how such 

technology is impacting the provision of 

care to certain beneficiaries, costs, 

quality, and outcomes, and determine if 

further requirements surrounding the 

use of telecommunications technology 

are needed. 

We are also soliciting comments on 

future refinement of these G-codes 

beginning July 1, 2023. Specifically 

whether the codes should differentiate 

the type of clinician performing the 

service via telecommunications 

technology, such as a therapist versus 

therapist assistant; and whether new Gcodes should differentiate the type of 

service being performed through the use 

of telecommunications technology, such 

as: skilled nursing services performed 

for care plan oversight (for example, 

management and evaluation or 

observation and assessment) versus 

teaching; or physical therapy services 

performed for the establishment or 

performance of a maintenance program 

versus other restorative physical therapy 

services. 

We will issue program instruction 

outlining the use of new codes for the 

purposes of tracking the use of 

telecommunications technology under 

the home health benefit with sufficient 

notice to enable HHAs to make the 

necessary changes in their electronic 

health records and billing systems. As 

stated previously, we will begin 

collecting this information on home 

health claims by January 1, 2023, on a 

voluntary basis by HHAs, and will 

require this information be reported on 

home health claims beginning in July, 

2023. We would issue further program 

instruction prior to July 1, 2023, if the 

G-code description changes between 

January 1, 2023, and July 1, 2023, based 

on comments in this proposed rule. 

However, we reiterate that the collection 

of information on the use of 

telecommunications technology does 

not mean that such services are 

considered ‘‘visits’’ for purposes of 

eligibility or payment. In accordance 

with section 1895(e)(1)(A) and (B) of the 

Act, such data will not be used or 

factored into case-mix weights, or count 

towards outlier payments or the LUPA 

threshold per payment period. 

III. Home Health Quality Reporting 

Program (HH QRP) 

A. Background and Statutory Authority 

The HH QRP is authorized by section 

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

1895(b)(3)(B)(v)(II) of the Act requires 

that, for 2007 and subsequent years, 

each home health agency (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 in 

accordance with this clause, the 

Secretary shall reduce the home health 

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, as further reduced by 

the productivity adjustment (except in 

2018 and 2020) described in section 

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

reduction of that increase by 2 

percentage points for failure to comply 

with the requirements of the HH QRP 

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. 

The HH QRP regulations can be found 

at 42 CFR 484.245 and 484.250. 

B. General Considerations Used for the 

Selection of Quality Measures for the 

HH QRP 

For a detailed discussion of the 

considerations we historically use for 

measure selection for the HH QRP 

quality, resource use, and other 

measures, we refer readers to the CY 

2016 HH PPS final rule (80 FR 68695 

through 68696). In the CY 2019 HH PPS 

final rule with comment period (83 FR 

56548 through 56550), we finalized the 

factors we consider for removing 

previously adopted HH QRP measures. 

C. Quality Measures Currently Adopted 

for the CY 2023 HH QRP 

The HH QRP currently includes 20 

measures for the CY 2023 program year, 

as described in Table C1. 

BILLING CODE 4120–01–P 


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TABLE Cl: MEASURES CURRENTLY ADOPTED FOR THE CY 2023 HH QRP 

QMName 

Ambulation Application of Falls 

Application of Functional Assessment 

Bathing 

Bed Transferring DRR Dyspnea 

Influenza 

Oral Medications 

Pressure Ulcer/Injury 

Timely Care 

TOH - Provider TOH - Patient 

QMName 

ACH 

DTC 

EDUse 

MSPB 

OASIS-based 

Improvement in Ambulation/Locomotion (NQF #0167). 

Application of Percent of Residents Experiencing One or More Falls with Major Injury (Long Stay) (NQF #0674). 

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 ). 

Improvement in Bathing (NQF #0174). Improvement in Bed Transferring (NQF # 0175). 

Drug Regimen Review Conducted With Follow-Up for Identified Issues- Post Acute Care (PAC) HH QRP. 

Improvement in Dyspnea. Influenza Immunization Received for Current Flu Season 

Improvement in Management of Oral Medications (NQF #0176). 

Changes in Skin Integrity Post-Acute Care 

Timely Initiation Of Care (NQF #0526). 

Transfer of Health Information to Provider-Post-Acute Care1 

Transfer of Health Information to Patient-Post-Acute Care1 

Claims-based 

Acute Care Hospitalization During the First 60 Days of HH (NQF #0171 ). 

Discharge to Community-Post Acute Care (PAC) Home Health (HH) Quality Reporting Program (QRP) (NQF #3477) 

Emergency Department Use without Hospitalization During the First 60 Days ofHH (NQF #0173). 

Total Estimated Medicare Spending Per Beneficiary (MSPB}-Post Acute Care (PAC) HH QRP. 
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PPR Potentially Preventable 30-Day Post-Discharge Readmission Measure for HH Quality Reporting Program. PPH Home Health Within Stay Potentially Preventable Hospitalization 

QMName HHCAHPS-based 

CARPS Home Health Survey CARPS® Home Health Care Survey ( experience with care) (NQF #051 Tj2 

- How often the HH team gave care in a professional way. 

- How well did the HH team communicate with patients. 

- Did the HH team discuss medicines, pain, and home safety with patients. 

- How do patients rate the overall care from the HHA. 

- Will patients recommend the HHA to friends and family. 

NOTES: 

1 Data collection delayed due to the COVID-19 public health emergency for the TOH-Patient and TOH-Provider. 

2 The HHCAHPS has five components that together are used to represent one NQF-endorsed measure. 
37662 Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 

20https://www.govinfo.gov/content/pkg/PLAW108publ173/pdf/PLAW-108publ173.pdf. 

21National Quality Forum. MAP Coordination 

Strategy for Post-Acute Care and Long-Term Care 

Performance Measurement. February 2012. 

Available at https://www.qualityforum.org/ 

Publications/2012/02/MAP_Coordination_Strategy_

for_Post-Acute_Care_and_Long-Term_Care_

Performance_Measurement.aspx. Accessed March 

21, 2022. 

D. Proposal To End the Suspension of 

OASIS Data Collection on NonMedicare/Medicaid HHA Patients To 

Require HHAs To Submit All-Payer 

OASIS Data for Purposes of the HH 

QRP, Beginning With the CY 2025 

Program Year 

In 1987, Congress added a new 

section 1891(d) to the Act (section 

4021(b) of Pub. L. 100–203 (December 

22, 1987)). The statute required the 

Secretary to develop a comprehensive 

assessment for Medicare-participating 

HHAs. In 1993, CMS (then known as 

HCFA) developed an assessment 

instrument that identified each patient’s 

need for home care and that meets the 

patient’s medical, nursing, 

rehabilitative, social and discharge 

planning needs. As part of this 

assessment, Medicare-certified HHAs 

were required to use a standard core 

assessment data set, the ‘‘Outcome and 

Assessment Information Set’’ 

(‘‘OASIS’’). Section 1891(d) of the Act 

requires, as part of the home health 

assessment, a survey of the quality of 

care and services furnished by the 

agency as measured by indicators of 

medical, nursing, and rehabilitative care 

provided by the HHA. OASIS is the 

designated assessment instrument (or 

instruments) for use by an HHA in 

complying with the requirement. In the 

January 25, 1999, final rule titled, 

‘‘Medicare and Medicaid Programs: 

Comprehensive Assessment and Use of 

the OASIS as Part of the Conditions of 

Participation for Home Health 

Agencies,’’ we also required HHAs to 

submit the data collected by the OASIS 

assessment to HCFA as an HHA 

condition of participation (64 FR 3772). 

Early on, privacy concerns were 

raised by HHAs around the collection of 

all-payer data and the release of 

personal health information. As we 

indicated in the study, any new 

collection requirements such as this 

raise concerns and this was no 

exception. In response to the privacy 

concerns, CMS took steps to mask the 

personal health information before the 

data was transmitted to the Quality 

Improvement and Evaluation System 

(QIES). In the study, we collected 

information from HHAs and the 

industry including the surveying of 

Agencies by one of the trade 

organizations and note that the privacy 

concerns initially raised were not raised 

as an ongoing concern. Based upon this 

feedback, we conclude that the privacy 

issues raised initially are no longer a 

concern. 

Subsequently, Congress enacted 

section 704 of the Medicare Prescription 

Drug, Improvement, and Modernization 

Act of 2003 (MMA), which suspended 

the legal authority of the Secretary to 

require HHAs to report OASIS 

information on non-Medicare/nonMedicaid patients until at least 2 

months after the Secretary published 

final regulations on CMS’s collection 

and use of those data following the 

submission of a report to Congress on 

the study required under section 704(c) 

of the MMA. This study required the 

Secretary to examine the use of nonMedicare/non-Medicaid OASIS data by 

large HHAs, including whether there 

were unique benefits from the analysis 

of that information that CMS could not 

obtain from other sources, and the value 

of collecting such data by small HHAs 

versus the administrative burden of 

collection. In conducting the study, the 

Secretary was also required to obtain 

recommendations from quality 

assessment experts on the use of such 

information and the necessity of HHAs 

collecting such information.20

The Secretary conducted the study 

required under section 704 of the MMA 

in 2004 to 2005 and submitted it to 

Congress in December 2006 (https:// 

www.cms.gov/files/document/cmsoasis-study-all-payer-data-submission2006.pdf). The study made the 

following key findings: 

• There are significant differences 

between private pay and Medicare/ 

Medicaid patients in terms of diagnosis, 

patient characteristics, and patient 

outcomes. Within-agency correlation 

between Medicare/Medicaid and private 

pay patient outcomes was low, 

indicating that outcomes based on 

Medicare/Medicaid patient data cannot 

be generalized to serve as a proxy for 

private pay patients. 

• Risk adjustment models at the time 

did not account for all of the sources of 

variation in outcomes across different 

payer groups and as a result, measures 

could produce misleading information. 

• Requiring OASIS data collection on 

private pay patients at Medicarecertified HHAs could increase staff and 

patient burden and would require CMS 

to develop a mechanism for these 

agencies to receive reports from CMS on 

their private pay patients. 

• A change to all-payer assessment 

data collection would strengthen CMS’s 

ability to assess and report indicators of 

the quality of care furnished by HHAs 

to their entire patient population. 

After considering the study’s findings, 

the Secretary noted that the suspension 

of OASIS collection from non-Medicare 

patients would continue because ‘‘it 

would be unfair to burden the providers 

with the collection of OASIS at this time 

since the case mix and outcomes reports 

are not designed to include private pay 

patients.’’ The Secretary also noted that 

it would be inappropriate for CMS to 

collect the private pay OASIS data and 

not use it. The Secretary further stated 

that ‘‘if funding for the development of 

HHA patient outcome and case mix 

reports for private pay patients is 

identified as a priority function, CMS 

would not hesitate to call for the 

removal of the suspension of OASIS for 

private pay patients.’’ 

In the November 9, 2006, final rule, 

‘‘Medicare Program; Home Health 

Prospective Payment System Rate 

Update for Calendar Year 2007 and 

Deficit Reduction Act of 2005 Changes 

to Medicare Payment for Oxygen 

Equipment and Capped Rental Durable 

Medical Equipment’’, we finalized our 

policy that the agency would continue 

to suspend collection of OASIS all payer 

data (71 FR 65883 and 65889). 

Since 2006, CMS has laid the 

groundwork for the resumption of allpayer data submission because we want 

to represent overall care being provided 

to all patients in an HHA. CMS 

implemented the QIES and iQIES 

provider data reporting systems to 

securely transfer and manage 

assessment data across QRPs, including 

HH. These systems can now support an 

extensive range of provider reports, 

including case-mix reports for private 

pay patients. The HH QRP program 

expanded quality domains to include 

patient reported outcome measures and 

new assessment and claims-based 

quality measures. We sought and 

received public comment on several 

occasions regarding data reporting on all 

HHA patients, regardless of payer type. 

In February 2012, the NQF-convened 

MAP also issued a report that 

encouraged establishing a data 

collection and transmission 

infrastructure for all payers that would 

work across PAC settings.21 In the July 

28, 2017, and November 7, 2017, ‘‘Home 

Health Prospective Payment System 

Rate Update and CY 2018 Case-Mix 

Adjustment Methodology Refinements; 

Home Health Value-Based Purchasing 

Model; and Home Health Quality 

Reporting Requirements’’ proposed and 

final rules (at 82 FR 35372 through 

35373 and 82 FR 51736 through 51737, 

respectively) and in the July 18, 2019, 


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and November 8, 2019, ‘‘Medicare and 

Medicaid Programs; CY 2020 Home 

Health Prospective Payment System 

Rate Update’’ proposed and final rules 

(at 84 FR 34686 and 84 FR 60478, 

respectively), we sought and responded 

to input on whether we should require 

quality data reporting on all HHA 

patients, regardless of payer source, to 

ensure representation of the quality of 

the services provided to the entire HHA 

population. In the ‘‘CY 2018 Home 

Health Prospective Payment System 

Rate Update and CY 2019 Case-Mix 

Adjustment Methodology Refinements; 

Home Health Value-Based Purchasing 

Model; and Home Health Quality 

Reporting Requirements’’ final rule, 

some commenters shared that there 

would be increased burden from 

requiring all-payer data submissions (82 

FR 51676). A few commenters also 

raised the issue of whether it would be 

appropriate to collect and report private 

pay data, given that private payors may 

have different care pathways, approval, 

and authorization processes. In the CY 

2020 HH PPS proposed rule, we also 

sought input on whether collection of 

quality data used in the HH QRP should 

include all HHA patients, regardless of 

their payer source (84 FR 60478). 

Several commenters supported 

expanding the HH QRP to include 

collection of data on all patients 

regardless of payer. Several commenters 

noted that this expanded data collection 

would not be overly burdensome 

because the majority of HHAs already 

complete the OASIS on all patients, 

regardless of payer status. Commenters 

were concerned that the usefulness of 

all-payer data collection to CMS’s health 

policy development would not 

outweigh the additional reporting 

burden. Several commenters supporting 

all-payer data collection stated that 

expansion of the data collection would 

align the HH QRP’s data collection 

policy with that of Hospices and LongTerm Care Hospitals (LTCHs), as well as 

the data collection policy under the 

Merit-based Incentive Payment System. 

Other reasons cited by commenters who 

supported the expanded data collection 

included more accurate representation 

of the quality of care furnished by HHAs 

to the entire HH population, the ability 

of such data to better guide quality 

improvement activities, and the 

reduction of current administrative 

efforts made by HHAs to ensure that 

only OASIS data for Medicare and 

Medicaid patients are reported to CMS. 

We believe that collecting OASIS data 

on all HHA patients, regardless of payer, 

would align our data collection 

requirements under the HH QRP with 

the data collection requirements for the 

LTCH QRP and Hospice QRP. We also 

believe that the most accurate 

representation of the quality of care 

furnished by HHAs is best captured by 

calculating the assessment-based 

measures rates using OASIS data 

submitted on all HHA patients, 

regardless of payer. New risk adjustment 

models with all-payer data would better 

represent the full spectrum of patients 

receiving skilled care in HHAs. The 

submission of all-payer OASIS data 

would also enable us to meaningfully 

compare performance on quality 

measures across PAC settings. For 

example, Changes in Skin Integrity PostAcute Care is currently reported by 

different PAC payers on different 

denominators of payer populations, 

which greatly inhibits our ability to 

compare performance on this measure 

across PAC settings. Standardizing the 

denominator for cross setting PAC 

measures to include all patients will 

enable us to make these comparisons, 

which we believe will realize our goal 

of establishing consistent measures of 

quality across PAC settings. 

The concerns raised surrounding 

privacy outlined above have been 

mitigated. We take the privacy and 

security of individually identifiable 

health information of all patients very 

seriously. CMS data systems conform to 

all applicable Federal laws, regulations 

and standards on information security 

and data privacy. The systems limit data 

access to authorized users and monitor 

such users to help protect against 

unauthorized data access or disclosures. 

CMS anticipates updating the current 

provider data reporting system in iQIES 

to address the addition of private payer 

patients. 

For these reasons, we are proposing to 

end the suspension of non-Medicare/ 

Medicaid OASIS data collection and to 

require HHAs to submit all-payer OASIS 

data for purposes of the HH QRP 

beginning with the CY 2025 HH QRP 

program year. We would use the OASIS 

data to calculate all measures for which 

OASIS is a data source. Although the 

2006 report recommended that the 

suspension continue, the subsequent 

passage of the IMPACT Act (Pub. L. 

113–185) in 2014, requiring us to create 

a uniform quality measurement system 

which would allow us to compare 

outcomes across post-acute care 

providers, requires us to revisit the 

policy. We have indeed established 

such a uniform quality measurement 

system, based on standardized patient 

assessment data leading us to propose 

OASIS data collection on NonMedicare/Non-Medicaid patients. There 

are now cross-setting quality measures 

in place that should have consistent 

reporting parameters but currently do 

not have consistent reporting 

parameters because they currently have 

only Medicare and Medicaid 

populations. The goal of CMS is to have 

these measures reported for all patients 

for all payer sources. The iQIES system 

utilized by providers is robust enough to 

make feasible the generation of outcome 

and case mix reports for private pay 

patients whereas the 2006 QIES system 

lacked this functionality. The HH QRP 

program also has a more robust measure 

set, including patient reported 

outcomes, a criteria of importance for 

CMS to move forward with all-payer 

collection. We believe that the 

maturation of the HH QRP as described 

previously argues for the collection of 

OASIS all-payer data. It will improve 

the HH QRP program’s ability to assess 

HHA quality and allow the HH QRP to 

foster better quality care for patients 

regardless of payer source. It will also 

support CMS’s ability to compare 

standardized outcome measures across 

PAC settings. 

Consistent with the two-quarter 

phase-in that we typically use when 

adopting new reporting requirements for 

the HHAs, we are proposing that for the 

CY 2025 HH QRP, the expanded 

reporting would be required for patients 

discharged between January 1, 2024, 

and June 30, 2024. Beginning with the 

CY 2026 HH QRP, HHAs would be 

required to report assessment based 

quality measure data and standardized 

patient assessment data on all patients, 

regardless of payer, for the applicable 12 

month performance period (which for 

the CY 2026 program, would be patients 

discharged between July 1, 2024, and 

June 30, 2025). 

While we appreciate that submitting 

OASIS data on all HHA patients 

regardless of payer source may create 

additional burden for HHAs, we also 

note that the current practice of 

separating and submitting OASIS data 

on only Medicare beneficiaries has 

clinical and workflow implications with 

an associated burden. As noted 

previously, we also understand that it is 

common practice for HHAs to collect 

OASIS data on all patients, regardless of 

payer source. Requiring HHAs to report 

OASIS data on all patients will provide 

CMS with the most robust, accurate 

reflection of the quality of care 

delivered to Medicare beneficiaries as 

compared with non-Medicare patients. 

E. Proposed Technical Changes 

We are proposing to amend the 

regulation text in § 484.245(b)(1) as a 

technical change to consolidate the 

statutory references to data submission 


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Pneumonia: Retrospective Cohort Study. British 

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Quality and Equity of Care in U.S. Hospitals. New 

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2308. 28Polyakova, M., et al. Racial Disparities In 

Excess All-Cause Mortality During The Early 

COVID–19 Pandemic Varied Substantially Across 

States. Health Affairs. 2021; 40(2): 307–316. 29Rural Health Research Gateway. Rural 

Communities: Age, Income, and Health Status. 

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PDF/Update_HHS_Disparities_Dept-FY2020.pdf. 31www.cdc.gov/mmwr/volumes/70/wr/ 

mm7005a1.htm. 32Poteat TC, Reisner SL, Miller M, Wirtz AL. 

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doi:10.1101/2020.07.21.20159327. 33Milkie Vu et al. Predictors of Delayed 

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Epstein AM. Association between race, 

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40 IBID. 

to § 484.245(b)(1)(i) and 

§ 484.245(b)(1)(ii). We are also 

proposing to modify § 484.245(b)(1)(iii) 

to describe additional requirements 

specific to HHCAHPS to make it clear 

that A through E only apply to 

HHCAHPS. 

In this technical change we 

specifically propose moving quality data 

required under section 

1895(b)(3)(B)(v)(II) from 

§ 484.245(b)(1)(iii) to 

§ 484.245(b)(1)(i).22 Specifically, the 

proposed § 484.245(b)(1)(i) would state, 

‘‘Data on measures specified under 

sections 1895(b)(3)(B)(v)(II), 1899B(c)(1), 

and 1899B(d)(1) of the Act.’’ The 

proposed § 484.245(b)(1)(iii) would 

state, ‘‘For the purposes of this 

HHCAHPS survey data submission, the 

following additional requirements 

apply:’’. 

We invite public comments on this 

proposal. 

F. Proposed Codification of the HH QRP 

Measure Removal Factors 

In the CY 2019 HH PPS final rule with 

comment period (83 FR 56548 through 

56550), we adopted eight measure 

removal factors that we consider when 

determining whether to remove 

measures from the HH QRP measure set: 

• 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. 

• Factor 8. The costs associated with 

a measure outweigh the benefit of its 

continued use in the program. To align 

the HH QRP with similar quality 

reporting programs (that is SNF QRP, 

IRF QRP, and LTCH QRP) we are 

proposing to amend 42 CFR 484.245 to 

add eight HH QRP measure removal 

factors in a new paragraph (b)(3). We 

welcome comments on this proposal. 

G. Request for Information: Health 

Equity in the HH QRP 

CMS defines health equity as the 

attainment of the highest level of health 

for all people, where everyone has a fair 

and just opportunity to attain their 

optimal health regardless of race, 

ethnicity, disability, sexual orientation, 

gender identity, socioeconomic status, 

geography, preferred language, or other 

factors that affect access to care and 

health outcomes.23 CMS is working to 

advance health equity by designing, 

implementing, and operationalizing 

policies and programs that support 

health for all the people served by our 

programs, eliminating avoidable 

differences in health outcomes 

experienced by people who are 

underserved, and providing the care and 

support that our enrollees need to 

thrive.24 CMS’ goals are in line with 

Executive Order 13985, on the 

advancement of racial equity and 

support for the underserved 

communities, which can be found at 86 

FR 7009 (January 25, 2021) (https://

www.whitehouse.gov/briefing-room/ 

presidential-actions/2021/06/25/ 

executive-order-on-diversity-equityinclusion-and-accessibility-in-thefederal-workforce/). 

Belonging to an underserved 

community is often associated with 

worse health 

outcomes.25 26 27 28 29 30 31 32 33 Such 

disparities in health outcomes are the 

result of multiple factors. Although not 

the sole determinants, poor access to 

care and provision of lower quality 

health care are important contributors to 

health disparities notable for CMS 

programs. Prior research has shown that 

home health agencies serving higher 

proportions of Black and low-income 

older adults furnish lower quality care 

than those with lower proportions of 

such patients.34 It is unclear why this 

relationship exists, but some evidence 

suggests that these outcomes are the 

result of reduced access to home health 

agencies with the highest scores for 

quality and health outcomes measures 

reported (subsequently referred to as 

high-quality HHAs).35 Research in long 

term care access has shown that 

neighborhoods with larger proportions 

of Black, Hispanic, and low-income 

residents have lower access to a range 

of high-quality care including hospitals, 

primary care physicians, nursing homes, 

and community-based long-term 

services.36 37 38 A recent study found that 

Black and Hispanic home health 

patients were less likely to use high 

quality home health agencies than 

White patients who lived in the same 

neighborhoods.39 This difference in use 

of high quality HHAs persisted even 

after adjusting for patient health status, 

suggesting disparity in access to higherquality home health agency was present. 

Disparities exist within neighborhoods, 

where Black, Hispanic, and lowerincome home health patients that live in 

a neighborhood with higher-quality 

home health agencies still have less 

access to these HHAs.40 Disparities also 

persist across neighborhoods where the 

researchers found that 40–77 percent of 

disparities in high-quality agency use 

was attributable to neighborhood-level 


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41Fashaw-Walters, SA. Rahman, M., Gee, G. et al. 

Out Of Reach: Inequities In The Use Of HighQuality Home Health Agencies. Health Affairs 2022 

41(2):247–255. 

42Werner RM, Bressman E. Trends in post-acute 

care utilization during the COVID–19 pandemic. J 

Am Med Dir Assoc. 2021;22(12):2496–9. 

43Werner RM, Asch DA. The unintended 

consequences of publicly reporting quality 

information. JAMA. 2005;293(10):1239–44. 

44 Davitt JK, Bourjolly J, Frasso R. Understanding 

inequities in home health care outcomes: staff 

views on agency and system factors. Res Gerontol 

Nurs. 2015;8(3):119–29. 

45https://www.cms.gov/Medicare/QualityInitiatives-Patient-Assessment-Instruments/Quality

InitiativesGenInfo/Downloads/CMS-QualityStrategy.pdf. 

46Report to Congress: Improving Medicare 

PostAcute Care Transformation (IMPACT) Act of 

2014 Strategic Plan for Accessing Race and 

Ethnicity Data. January 5, 2017. Available at https:// 

www.cms.gov/About-CMS/Agency-Information/ 

OMH/Downloads/Research-Reports-2017-Report-toCongress-IMPACT-ACT-of-2014.pdf. 

47Healthy People 2030, U.S. Department of 

Health and Human Services, Office of Disease 

Prevention and Health Promotion. Retrieved 06/09/ 

22. 

48https://www.cms.gov/About-CMS/AgencyInformation/OMH/Downloads/CLAS-Toolkit-12-7- 

16.pdf. 

factors.41 The issue of disparity in 

access is especially critical to address 

currently with the COVID–19 public 

health emergency (PHE). The PHE has 

increased demand for home health 

services instead of nursing home care 

for many patients seeking post-acute 

care.42 Factors outside of neighborhood 

effects that could affect inequities in 

home health care and access to care may 

include a provider’s selection of 

patients with higher socioeconomic 

status (SES) who are perceived to have 

a lower likelihood of reducing provider 

quality ratings 43 or a provider’s biased 

perception of a patient’s risk behavior 

and adherence to care plans.44 These 

findings suggest the need to address 

issues related to care and access when 

striving to improve health equity. 

We are committed to achieving equity 

in health care outcomes for beneficiaries 

by supporting providers in quality 

improvement activities to reduce health 

disparities, enabling beneficiaries to 

make more informed decisions, and 

promoting provider accountability for 

health care disparities.45 46 CMS is 

committed to closing the equity gap in 

CMS quality programs. 

We thank commenters for previous 

input to our request for information on 

closing the health equity gap in home 

health care in the CY 2022 HH PPS final 

rule (86 FR 62240). Many commenters 

shared that relevant data collection and 

appropriate stratification are very 

important in addressing any health 

equity gaps. These commenters noted 

that CMS should consider potential 

stratification of health outcomes. 

Stakeholders, including providers, also 

shared their strategies for addressing 

health disparities, noting that this was 

an important commitment for many 

health provider organizations. 

Commenters also shared 

recommendations for additional social 

determinants of health (SDOH) data 

elements that could strengthen their 

assessment of disparities and issues of 

health equity. SDOH are the conditions 

in the environments where people are 

born, live, learn, work, play, worship, 

and age that affect a wide range of 

health, functioning, and quality-of-life 

outcomes and risks.47 Many 

commenters suggested capturing 

information related to food insecurity, 

income, education, transportation, and 

housing. We will continue to take all 

comments and suggestions into account 

as we work to develop policies on this 

important topic. We appreciate home 

health agencies and other stakeholders 

sharing their support and commitment 

to addressing health disparities and 

offering meaningful comments for 

consideration. As we continue to 

consider health equity within the HH 

QRP, we are soliciting public comment 

on the following questions: 

• What efforts does your HHA 

employ to recruit staff, volunteers, and 

board members from diverse 

populations to represent and serve 

underserved populations? How does 

your HHA attempt to bridge any cultural 

gaps between your personnel and 

beneficiaries/clients? How does your 

HHA measure whether this has an 

impact on health equity? 

• How does your HHA currently 

identify barriers to access to care in your 

community or service area? 

• What are the barriers to collecting 

data related to disparities, SDOH, and 

equity? What steps does your HHA take 

to address these barriers? 

• How does your HHA collect selfreported demographic information such 

as information on race and ethnicity, 

disability, sexual orientation, gender 

identity, veteran status, socioeconomic 

status, and language preference? 

• How is your HHA using collected 

information such as housing, food 

security, access to interpreter services, 

caregiving status, and marital status to 

inform its health equity initiatives? 

In addition, we are considering the 

adoption of a structural composite 

measure for the HH QRP, which could 

include organizational activities to 

address access to and quality of home 

health care for underserved populations. 

The composite structural measure 

concept could include HHA reported 

data on HHA activities to address 

underserved populations’ access to 

home health care. An HHA could 

receive a point (for a total of three 

points for the three domains) for each 

domain where data are submitted to a 

CMS portal, regardless of the action in 

that domain. 

HHAs could submit information such 

as documentation, examples, or 

narratives to qualify for the measure 

numerator. The domains under 

consideration for the measure, as well as 

how an HHA could satisfy each of those 

domains and earn a point for that 

domain, are the following: 

Domain 1: HHAs’ commitment to 

reducing disparities is strengthened 

when equity is a key organizational 

priority. Candidate domain 1 could be 

satisfied if an HHA submits data on 

actions it is taking with respect to health 

equity and community engagement in 

their strategic plan. HHAs could report 

data in the reporting year about their 

actions in each of the following areas, 

and submission of data for all elements 

could be required to qualify for the 

measure numerator. 

• HHAs attest to whether their 

strategic plan includes approaches to 

address health equity in the reporting 

year. 

• HHAs report community 

engagement and key stakeholder 

activities in the reporting year. 

• HHAs report on any attempts to 

measure input they solicit from patients 

and caregivers about care disparities 

they may experience as well as 

recommendations or suggestions for 

improvement. 

Domain 2: Training HHA board 

members, HHA leaders, and other HHA 

staff in culturally and linguistically 

appropriate services (CLAS),48 health 

equity, and implicit bias is an important 

step the HHA can take to provide 

quality care to diverse populations. 

Candidate domain 2 could focus on 

HHAs’ diversity, equity, inclusion 

training for board members and staff by 

capturing the following reported actions 

in the reporting year. Submission of 

relevant data for all elements could be 

required to qualify for the measure 

numerator. 

• HHAs attest as to whether their 

employed staff were trained in 

culturally sensitive care mindful of 

(SDOH in the reporting year and report 

data relevant to this training, such as 

documentation of specific training 

programs or training requirements. 

• HHAs attest as to whether they 

provided resources to staff about health 

equity, SDOH, and equity initiatives in 

the reporting year and report data such 


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49http://www.pacioproject.org/. 

50The Trusted Exchange Framework (TEF): 

Principles for Trusted Exchange (Jan. 2022), https:// 

www.healthit.gov/sites/default/files/page/2022-01/ 

Trusted_Exchange_Framework_0122.pdf. 

51Common Agreement for Nationwide Health 

Information Interoperability Version 1 (Jan. 2022), 

https://www.healthit.gov/sites/default/files/page/ 

2022-01/Common_Agreement_for_Nationwide_

Health_Information_Interoperability_Version_1.pdf. 

52Qualified Health Information Network (QHIN) 

Technical Framework (QTF) Version 1.0 (Jan. 

2022),https://www.rce.sequoiaproject.org/wpcontent/uploads/2022/01/QTF_0122.pdf. 

53The Common Agreement defines Individual 

Access Services (IAS) as ‘‘with respect to the 

Exchange Purposes definition, the services 

provided utilizing the Connectivity Services, to the 

extent consistent with Applicable Law, to an 

Individual with whom the QHIN, Participant, or 

Subparticipant has a Direct Relationship to satisfy 

that Individual’s ability to access, inspect, or obtain 

a copy of that Individual’s Required Information 

that is then maintained by or for any QHIN, 

Participant, or Subparticipant.’’ The Common 

Agreement defines ‘‘IAS Provider’’ as: ‘‘Each QHIN, 

Participant, and Subparticipant that offers 

Individual Access Services.’’ See Common 

Agreement for Nationwide Health Information 

Interoperability Version 1, at 7 (Jan. 2022), https:// 

www.healthit.gov/sites/default/files/page/2022-01/ 

Common_Agreement_for_Nationwide_Health_

Information_Interoperability_Version_1.pdf. 

as the materials provided or other 

documentation of the learning 

opportunities. 

Domain 3: HHA leaders and staff can 

improve their capacity to address health 

disparities by demonstrating routine 

and thorough attention to equity and 

setting an organizational culture of 

equity. This candidate domain could 

capture activities related to 

organizational inclusion initiatives and 

capacity to promote health equity. 

Examples of equity-focused factors 

include proficiency in languages other 

than English, experience working with 

diverse populations in the service area, 

and experience working with 

individuals with disabilities. 

Submission of relevant data for all 

elements could be required to qualify 

for the measure numerator. 

• HHAs attest as to whether they 

considered equity-focused factors in the 

hiring of HHA senior leadership, 

including chief executives and board of 

trustees, in the applicable reporting 

year. 

• HHAs attest as to whether equityfocused factors were included in the 

hiring of direct patient care staff (for 

example, therapists, nurses, social 

workers, physicians, or aides) in the 

applicable reporting year. 

• HHAs attest as to whether equity 

focused factors were included in the 

hiring of indirect care or support staff 

(for example, administrative, clerical, or 

human resources) in the applicable 

reporting year. 

We are interested in developing 

health equity measures based on 

information collected by HHAs not 

currently available on claims, 

assessments, or other publicly available 

data sources to support development of 

future quality measures. We are 

soliciting public comment on the 

conceptual domains and quality 

measures described in this section. 

Furthermore, we are soliciting public 

comments on publicly reporting a 

composite structural health equity 

quality measure; displaying descriptive 

information on Care Compare from the 

data HHAs provide to support health 

equity measures; and the impact of the 

domains and quality measure concepts 

on organizational culture change. 

G. 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 and 

patient access to their digital health 

information. 

To further interoperability in postacute care settings, CMS and the Office 

of the National Coordinator for Health 

Information Technology (ONC) 

participate in the Post-Acute Care 

Interoperability Workgroup (PACIO) to 

facilitate collaboration with industry 

stakeholders to develop Health Level 

Seven International® (HL7) Fast 

Healthcare Interoperability Resources®

(FHIR) standards.49 These standards 

could support the exchange and reuse of 

patient assessment data derived from 

the Minimum Data Set (MDS), Inpatient 

Rehabilitation Facility-Patient 

Assessment Instrument (IRF–PAI), 

LTCH Continuity Assessment Record 

and Evaluation (CARE) Data Set (LCDS), 

Outcome and Assessment Information 

Set (OASIS), and other sources. The 

PACIO Project has focused on HL7 FHIR 

implementation guides for functional 

status, cognitive status and new use 

cases on advance directives, reassessment timepoints, and Speech, 

Language, Swallowing, Cognitive 

communication and Hearing 

(SPLASCH) pathology. We encourage 

PAC provider and health IT vendor 

participation as the efforts advance. 

The CMS Data Element Library (DEL) 

continues to be updated and serves as 

a resource for PAC assessment data 

elements and their associated mappings 

to health IT standards, such as Logical 

Observation Identifiers Names and 

Codes (LOINC) and Systematized 

Nomenclature of Medicine Clinical 

Terms (SNOMED). The DEL furthers 

CMS’ goal of data standardization and 

interoperability. Standards in the DEL 

(https://www.del.cms.gov/DELWeb/ 

pubHome) can be referenced on the 

CMS website and in the ONC 

Interoperability Standards Advisory 

(ISA). The 2022 ISA is available at 

https://www.healthit.gov/isa. 

The 21st Century Cures Act (Cures 

Act) (Pub. L. 114–255, enacted 

December 13, 2016) required HHS and 

ONC to take steps to further 

interoperability for providers in settings 

across the care continuum. Section 

4003(b) of the Cures Act required ONC 

to take steps to advance interoperability 

through the development of a trusted 

exchange framework and common 

agreement aimed at establishing a 

universal floor of interoperability across 

the country. On January 18, 2022, ONC 

announced a significant milestone by 

releasing the Trusted Exchange 

Framework 50 and Common Agreement 

Version 1.51 The Trusted Exchange 

Framework is a set of non-binding 

principles for health information 

exchange, and the Common Agreement 

is a contract that advances those 

principles. The Common Agreement 

and the Qualified Health Information 

Network Technical Framework Version 

1 52 (incorporated by reference into the 

Common Agreement) establish the 

technical infrastructure model and 

governing approach for different health 

information networks and their users to 

securely share clinical information with 

each other—all under commonly agreed 

to terms. The technical and policy 

architecture of how exchange occurs 

under the Trusted Exchange Framework 

and the Common Agreement follows a 

network-of-networks structure, which 

allows for connections at different levels 

and is inclusive of many different types 

of entities at those different levels, such 

as health information networks, 

healthcare practices, hospitals, public 

health agencies, and Individual Access 

Services (IAS) Providers.53 For more 

information, we refer readers to https:// 

www.healthit.gov/topic/interoperability/ 

trusted-exchange-framework-andcommon-agreement. 

We invite readers to learn more about 

these important developments and how 

they are likely to affect HHAs. 

IV. Expanded Home Health ValueBased 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), the Center 

for Medicare and Medicaid Innovation 

(Innovation Center) implemented the 


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54https://innovation.cms.gov/data-and-reports/ 

2020/hhvbp-thirdann-rpt. 

55https://www.cms.gov/files/document/

certificationhome-health-value-based-purchasinghhvbpmodel.pdf. 

56https://www.cms.gov/newsroom/press-releases/

cms-takes-action-improve-home-health-careseniors-announces-intent-expand-home-healthvalue-based. 

Home Health Value-Based Purchasing 

(HHVBP) Model (‘‘original Model’’) in 

nine states on January 1, 2016. The 

design of the original HHVBP Model 

leveraged the successes and lessons 

learned from other CMS value-based 

purchasing programs and 

demonstrations to shift from volumebased payments to a model designed to 

promote the delivery of higher quality 

care to Medicare beneficiaries. The 

specific goals of the original HHVBP 

Model were to— 

• Provide incentives for better quality 

care with greater efficiency; 

• Study new potential quality and 

efficiency measures for appropriateness 

in the home health setting; and, 

• Enhance the current public 

reporting process. 

The original HHVBP Model resulted 

in an average 4.6 percent improvement 

in HHAs’ total performance scores (TPS) 

and an average annual savings of $141 

million to Medicare without evidence of 

adverse risks.54 The evaluation of the 

original model also found reductions in 

unplanned acute care hospitalizations 

and skilled nursing facility (SNF) stays, 

resulting in reductions in inpatient and 

SNF spending. The U.S. Secretary of 

Health and Human Services determined 

that expansion of the original HHVBP 

Model would further reduce Medicare 

spending and improve the quality of 

care. In October 2020, the CMS Chief 

Actuary certified that expansion of the 

HHVBP Model would produce Medicare 

savings if expanded to all states.55

On January 8, 2021, CMS announced 

the certification of the HHVBP Model 

for expansion nationwide, as well as the 

intent to expand the Model through 

notice and comment rulemaking.56

In the CY 2022 HH PPS final rule (86 

FR 62292 through 62336) and codified 

at 42 CFR part 484, subpart F, we 

finalized the decision to expand the 

HHVBP Model to all Medicare certified 

HHAs in the 50 States, territories, and 

District of Columbia beginning January 

1, 2022. We finalized that the expanded 

Model will generally use benchmarks, 

achievement thresholds, and 

improvement thresholds based on CY 

2019 data to assess achievement or 

improvement of HHA performance on 

applicable quality measures and that 

HHAs will compete nationally in their 

applicable size cohort, smaller-volume 

HHAs or larger-volume HHAs, as 

defined by the number of complete 

unique beneficiary episodes for each 

HHA in the year prior to the 

performance year. All HHAs certified to 

participate in the Medicare program 

prior to January 1, 2022, will be 

required to participate and will be 

eligible to receive an annual Total 

Performance Score based on their CY 

2023 performance. 

We finalized the quality measure set 

for the expanded Model, as well as 

policies related to the removal, 

modification, and suspension of 

applicable measures, and the addition of 

new measures and the form, manner 

and timing of the OASIS-based, Home 

Health Consumer Assessment of 

Healthcare Providers and Systems 

(HHCAHPS) survey-based, and claimsbased measures submission in the 

applicable measure set beginning CY 

2022 and subsequent years. We also 

finalized an appeals process, an 

extraordinary circumstances exception 

policy, and public reporting of annual 

performance data under the expanded 

Model. 

Additionally, in the CY 2022 HH PPS 

proposed rule (86 FR 35929) we 

solicited comments on the challenges 

unique to value-based purchasing 

frameworks in terms of health equity 

and ways in which we could 

incorporate health equity goals into the 

expanded HHVBP Model. We received 

comments related to the use of 

stabilization measures to promote access 

to care for individuals with chronic 

illness or limited ability to improve; 

collection of patient level demographic 

information for existing measures; and 

stratification of outcome measures by 

various patient populations to 

determine how they are affected by 

social determinants of health (SDOH). In 

the CY 2022 HHPPS final rule (86 FR 

62312) we summarized and responded 

to these comments received. 

In this proposed rule, we are 

proposing to replace the term baseline 

year with the terms HHA baseline year 

and Model baseline year and to change 

the calendar years associated with each 

of those baseline years, and soliciting 

comment on future approaches to health 

equity in the expanded HHVBP Model. 

B. Proposed Changes to the Baseline 

Years and New Definitions 

1. Definitions 

a. Background 

Benchmarks, achievement thresholds, 

and improvement thresholds are used to 

assess achievement or improvement of 

HHA performance on applicable quality 

measures. As codified at § 484.345, 

baseline year means the year against 

which measure performance in a 

performance year will be compared. As 

discussed in the CY 2022 HH PPS final 

rule (86 FR 62300), we finalized our 

proposal to use CY 2019 (January 1, 

2019, through December 31, 2019) as the 

baseline year for the expanded HHVBP 

Model. In that rule, we also codified at 

§ 484.350(b), that for a new HHA that is 

certified by Medicare on or after January 

1, 2019, the baseline year is the first full 

calendar year of services beginning after 

the date of Medicare certification, with 

the exception of HHAs certified on 

January 1, 2019, through December 31, 

2019, for which the baseline year is 

calendar year (CY) 2021, and the first 

performance year is the first full 

calendar year (beginning with CY 2023) 

following the baseline year. 

b. Proposals To Amend Definitions 

Since that final rule, it has come to 

our attention that there could be some 

confusion and we would like to explain 

our terminology more clearly by 

proposing to differentiate between two 

types of baseline years used in the 

expanded HHVBP Model. The Model 

baseline year is used to determine the 

benchmark and achievement threshold 

for each measure for all HHAs. For 

example, as finalized, CY 2019 data is 

used in the calculation of the 

achievement thresholds and 

benchmarks for all applicable measures 

for both the small cohort and for the 

large cohort. The HHA baseline year is 

used to determine the HHA 

improvement threshold for each 

measure for each individual competing 

HHA. For example, if an HHA is 

certified in CY 2021, CY 2022 data 

would be used in the calculation of the 

improvement thresholds for all 

applicable measures for that HHA. 

Therefore, we are proposing to amend 

§ 484.345 to remove the existing 

baseline year definition: means the year 

against which measure performance in a 

performance year will be compared. In 

its place, we are proposing to define: (1) 

HHA baseline year as the calendar year 

used to determine the improvement 

threshold for each measure for each 

individual competing HHA, and (2) 

Model baseline year as the calendar year 

used to determine the benchmark and 

achievement threshold for each measure 

for all competing HHAs. In line with 

these proposed definitions, we are 

proposing to make conforming revisions 

toto the definitions of achievement 

threshold and benchmark to indicate 

that they are calculated using the Model 

baseline year, and the definition of 

improvement threshold to indicate that 

it is calculated using the HHA baseline 


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year. Additionally, we are proposing to 

amend paragraph (a) of § 484.370 to 

remove the phrase ‘‘for the baseline 

year’’ because the calculation of the TPS 

using the applicable benchmarks and 

achievement thresholds (determined 

usingusing the Model baseline year) and 

improvement thresholds (determined 

using the HHA baseline year) is 

described at § 484.360. 

We invite public comments on these 

proposals. 

2. Proposed Change of HHA Baseline 

Years 

a. Background—New and Existing 

HHAs Baseline Years 

As previously discussed, in the CY 

2022 HH PPS final rule (86 FR 62300), 

we finalized our proposal to use CY 

2019 as the baseline year for the 

expanded HHVBP Model. Our intent 

was that the Model baseline year used 

to determine achievement thresholds 

and benchmarks is CY 2019 for all 

HHAs and the HHA baseline year used 

to determine an individual HHA’s 

improvement threshold is 2019 for 

HHAs certified prior to January 1, 2019. 

As discussed in the section IV.B.1.b. of 

this rule, we are proposing to replace 

the term baseline year with the terms 

Model baseline year and HHA baseline 

year to differentiate between two types 

of baseline years used in the expanded 

HHVBP Model. 

As mentioned earlier, in that same 

rule (86 FR 62423), we codified at 

§ 484.350(b), that for a new HHA that is 

certified by Medicare on or after January 

1, 2019, the baseline year is the first full 

calendar year of services beginning after 

the date of Medicare certification, with 

the exception of HHAs certified on 

January 1, 2019, through December 31, 

2019, for which the baseline year is 

calendar year (CY) 2021, and the first 

performance year is the first full 

calendar year (beginning with CY 2023) 

following the baseline year. Table D1 

depicts what was finalized in the CY 

2022 HH PPS final rule. 

b. Proposals To Change the HHA 

Baseline Year for New and Existing 

HHAs 

As discussed in the CY 2022 final 

rule, we stated that we may conduct 

analyses of the impact of using various 

baseline periods and consider any 

changes for future rulemaking (86 FR 

62300). Due to the continuing effects of 

the COVID–19 public health emergency 

(PHE), we conducted a measure-bymeasure comparison of performance for 

CY 2019 to CY 2021 for the expanded 

HHVBP Model’s measure set relative to 

the historical trends of those measures. 

We found that, while performance 

scores on the five applicable HHCAHPS 

measures and the OASIS-based 

‘‘Discharged to Community’’ remained 

stable from CY 2019 to CY 2021, there 

was a general trend upwards following 

historical trends for four of the five 

applicable OASIS-based measures. 

These trends were consistent with the 

historical national data that CMS used 

to monitor the original HHVBP Model 

beginning 2015. 


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TABLE Dl: NEW AND EXISTING HHAs BASELINE YEARS AS FINALIZED AND 

ILLUSTRATED IN TABLE 23 OF THE CY 2022 HH PPS FINAL RULE (86 FR 62301) 

Baseline Performance Payment 

Medicare-certification Date Year Year Year 

Prior to January 1, 2019 2019 2023 2025 

On Januarv 1, 2019 -December 31, 2019 2021 2023 2025 

On J anuarv 1, 2020 - December 31, 2020 2021 2023 2025 

On J anuarv 1, 2021 - December 31, 2021 2022 2023 2025 
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Figure D1: Emergency Department (ED) Use without Hospitalization During the First 60 Days of Home 

Health, Nationally, 2013-2021 

% episodes 

15 · 

10 

Notes: This figure shows observed rates of ED Use without Hospitalization During the First 60 Days of Home Health, 

without risk adjustment. HHAs with fewer than 20 episodes for the claims-based measures within a given calendar 

year were excluded from analysis for year. For 2021, episodes from 2020 Q4 - 2021 Q3 were used to determine 

whether HHAs had at least 20 episodes, because 2021 Q4 data was not available at the time the analysis was 

conducted. 

Figure D2: Acute Care Hospitalization During the First 60 Days of Home Health Use, Nationally, 2013-2021 

% episodes 

10 

5 

Notes: This figure shows observed rates of Acute Care Hospitalization During the First 60 Days of Home Health Use, 

without risk adjustment. HHAs with fewer than 20 episodes for the claims-based measures within a given calendar 

year were excluded from analysis for year. For 2021, episodes from 2020 Q4 - 2021 Q3 were used to determine 

whether HHAs had at least 20 episodes, because 2021 Q4 data was not available at the time the analysis was 

conducted. 
37670 Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 

57 Derived from data at https://data.cms.gov/

provider-data/archived-data/home-health-services. 

58https://www.cdc.gov/coronavirus/2019-ncov/ 

covid-data/covidview/past-reports/01282022.html. 

In contrast, Figures D1 and D2 that 

were derived from the archived HH 

quality data from CMS.data.gov 57

illustrate the trend of average national 

performance on the Acute Care 

Hospitalization During the First 60 Days 

of Home Health Use measure and the 

Emergency Department Use without 

Hospitalization During the First 60 Days 

of Home Health measure deviated 

significantly, with a drop of 9 percent 

and 15 percent in CY 2020, respectively, 

relative to CY 2019 (Table D2) and 

remained lower in CY 2021 as compared 

to historic trends that occurred prior to 

the pandemic. In the five years prior to 

2020, both measures demonstrated 

stable trends, varying +/¥5 percent 

from year to year, which highlights the 

significance of the change from CY 2019 

to CY 2020 compared to CY 2015 to CY 

2019. 

We note that for HHAs with sufficient 

data on each of the 12 applicable 

measures, performance on the two 

claims-based measures (Acute Care 

Hospitalization During the First 60 Days 

of Home Health Use and Emergency 

Department Use without Hospitalization 

During the First 60 Days of Home 

Health) makes up 35 percent of the total 

performance score used to determine 

payment adjustments under the Model. 

While average national performance on 

these measures in CY 2021 was similar 

to average national performance in CY 

2020, CY 2022 is the first year where the 

vast majority of beneficiaries are 

vaccinated; as of January 27, 2022, 95 

percent of Americans ages 65 years or 

older had received at least one dose of 

vaccine and 88.3 percent were fully 

vaccinated.58 In addition, there were 

viable treatments available and 

healthcare providers had nearly 2 years 

of experience managing COVID–19 

patients. We believe that more recent 

data from the CY 2022 time period is 

more likely to be aligned with 

performance years’ data under the 

expanded Model, and provide a more 

appropriate baseline for assessing HHA 

improvement for all measures under the 

Model as compared to both the pre-PHE 

CY 2019 data, as previously finalized for 

existing HHAs, and the CY 2021 data, as 

previously finalized for new HHAs 

certified between January 1, 2019 and 

December 31, 2020. Use of CY 2022 data 

for the HHA baseline year for all 

measures under the expanded Model 

would also allow all HHAs certified by 

Medicare prior to CY 2022 to have the 

same baseline period, based on the most 

recent available data, beginning with the 

CY 2023 performance year. Accordingly, 

we are proposing to change the HHA 

baseline year for HHAs certified prior to 

January 1, 2019, and for HHAs certified 

during January 1, 2019–December 31, 

2021 for all applicable measures used in 

the expanded Model, from CY 2019 and 

2021 respectively, to CY 2022 beginning 

with the CY 2023 performance year. 

Additionally, we are also proposing that 

for any new HHA certified on or after 

January 1, 2022, the HHA baseline year 

is the first full calendar year of services 

beginning after the date of Medicare 

certification and the first performance 

year is the first full calendar year 

following the HHA baseline year. 

As discussed in the CY 2022 HH PPS 

final rule, we understand that HHAs 

want to have time to examine their 

baseline data as soon as possible, and 

we stated that we anticipated making 

available baseline reports using the CY 


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TABLE D2: AVERAGE NATIONAL PERFORMANCE ON APPLICABLE MEASURES 

CY 2019 - CY 2021 

s of Home Health Use 15.5 14.1 14.1 

Da s of Home Health 13.1 11.2 11.8 

Care of Patients 88.3 88.3 88.1 

Communications between Providers and Patients 85.7 85.6 85.3 

82.8 81.6 80.9 

84.3 84.5 84.2 

Wil 78.8 78.8 78.4 

Notes: All measures are risk-adjusted and presented as average HHA-level performance, weighted by the number of OASIS 

episodes for each HHA. 

Includes HHAs indicated as active (not terminated) at the beginning of each year in the December 2021 Provider of Services file 

with at least one Start of Care (SOC)/Resumption of Care (ROC)/End of Care (EOC) assessment submitted during the year and 

reportable measures for at least five of the 12 measures. 

[a] Medicare FFS claims-based measures for 2021 used data from October 1, 2020, through September 30, 2021, due to data 

availability. 

[b] HHCAHPS-based measures for 2021 used data from July 1, 2020, through June 30, 2021, due to data availability. 
Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 37671 

2019 baseline year data in advance of 

the first performance year under the 

expanded Model (CY 2023). If we were 

to finalize this proposal to instead use 

CY 2022 data for the HHA baseline year, 

we would intend to continue to make 

these baseline data available as soon as 

administratively possible, and would 

anticipate providing HHAs with their 

final individual improvement 

thresholds in the summer of CY 2023. 

We note that this would be consistent 

with the original HHVBP Model, for 

which improvement thresholds using 

CY 2015 data were made available 

HHAs in the first interim performance 

report (IPR) in the summer of the first 

performance year (CY 2016). 

This proposal is made in conjunction 

with our proposal to add the definition 

of the term HHA baseline year discussed 

previously. We believe that this 

proposal would allow all eligible HHAs, 

starting with the CY 2023 performance 

year, to compete on a level playing field 

with all HHA baseline data being after 

the peak of the pandemic. Accordingly, 

we are proposing to amend § 484.350(b) 

to reflect that for a new HHA, 

specifically an HHA that is certified by 

Medicare on or after January 1, 2022, the 

HHA baseline year is the first full 

calendar year of services beginning after 

the date of Medicare certification, and to 

add § 484.350(c) to reflect that for an 

existing HHA, specifically an HHA that 

is certified by Medicare before January 

1, 2022, the HHA baseline year is CY 

2022. Table D3 depicts these proposals. 

In developing this proposal, we 

considered changing the HHA baseline 

year to CY 2021 for all HHAs for all of 

the applicable measures or, 

alternatively, not changing the HHA 

baseline year for any of the applicable 

measures. We decided against those 

alternatives for the reasons explained 

previously in support of our proposal to 

change the HHA baseline year to CY 

2022. We also considered changing the 

HHA baseline for only some of the 

applicable measures. For example, we 

considered changing the HHA baseline 

to CY 2022 only for the claims-based 

measures and using the HHA baseline of 

CY 2019 or CY 2021 (see Table D1) for 

applicable HHAs for the OASIS-based 

and HHCAHPS-based measures. 

However, for the reasons previously 

discussed, we are instead proposing to 

change the HHA baseline year to CY 

2022 for all applicable measures used in 

the expanded HHVBP Model, which 

would allow all HHAs certified by 

Medicare prior to CY 2022 to have the 

same baseline period for all measures, 

using the most recent available data, for 

the performance year beginning CY 

2023. 

We invite public comments on these 

proposals. 

3. Proposal to Change the Model 

Baseline Year 

As mentioned earlier, under the 

policy finalized in the CY 2022 HH PPS 

final rule (86 FR 62300), we previously 

adopted CY 2019 as the Model baseline 

year for the expanded HHVBP Model for 

all HHAs. This baseline year is used to 

determine the benchmarks and 

achievement threshold for each measure 

for all HHAs. 

Consistent with our proposal to 

update the HHA baseline year to CY 

2022 for all HHAs that are certified by 

Medicare before January 1, 2022, and in 

conjunction with our proposal to more 

clearly define the Model baseline year 

in previous section IV.B.1.b., we are also 

proposing to change the Model baseline 

year from CY 2019 to CY 2022 for the 

CY 2023 performance year and 

subsequent years. This would enable us 

to measure competing HHAs’ 

performance using benchmarks and 

achievement thresholds that are based 

on the most recent data available. This 

would also allow the benchmarks and 

achievement thresholds to be set using 

data from after the most acute phase of 

the COVID–19 PHE, which we believe 

would provide a more appropriate basis 

for assessing performance under the 

expanded Model than the CY 2019 prePHE period. As previously discussed, 

CY 2022 is the first year where the vast 

majority of beneficiaries are vaccinated, 

there are viable treatments available and 

healthcare providers had nearly two 

years of experience managing COVID– 

19 patients. We anticipate that this more 

recent data from the CY 2022 time 

period would more likely be aligned 

with performance years’ data under the 

expanded Model. As discussed in 

connection with our proposal to use CY 

2022 data for the HHA baseline year, if 

we were to finalize this proposal to use 

CY 2022 rather than CY 2019 data for 

the Model baseline year, we would 

anticipate providing HHAs with the 

final achievement thresholds and 

benchmarks in the July 2023 IPR in the 

summer of CY 2023. This would be 

consistent with the rollout of the 

original HHVBP Model in which 

benchmarks and achievement 

thresholds using 2015 data were made 

available to HHAs during the summer of 

the first performance year (CY 2016). 

We invite public comments on this 

proposal. 

C. Request for Comment on a Future 

Approach to Health Equity in the 

Expanded HHVBP Model 

Significant and persistent inequities 

in healthcare outcomes exist in the 

United States. Belonging to a racial or 

ethnic minority group; living with a 

disability; being a member of the 

lesbian, gay, bisexual, transgender, and 

queer (LGBTQ+) community; living in a 

rural area; being a member of a religious 

minority; or being near or below the 

poverty level, is often associated with 

worse health 


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TABLE D3: EXAMPLE: PROPOSED HHA BASELINE YEARS, PERFORMANCE 

YEAR AND PAYMENT YEAR FOR HHAs CERTIFIED 

THROUGH DECEMBER 31, 2023 

HHA Baseline Performance Payment 

Medicare-certification Date Year Year Year 

Prior to January 1, 2019 2022 2023 2025 

January 1, 2019-December 31, 2021 2022 2023 2025 

January 1, 2022 - December 31, 2022 2023 2024 2026 

January 1, 2023 - December 31, 2023 2024 2025 2027 
37672 Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 

59 Joynt KE, Orav E, Jha AK. (2011). Thirty-day 

readmission rates for Medicare beneficiaries by race 

and site of care. JAMA, 305(7):675–681. 

60Lindenauer PK, Lagu T, Rothberg MB, et al. 

(2013). Income inequality and 30 day outcomes 

after acute myocardial infarction, heart failure, and 

pneumonia: Retrospective cohort study. British 

Medical Journal, 346. 

61Trivedi AN, Nsa W, Hausmann LRM, et al. 

(2014). Quality and equity of care in U.S. hospitals. 

New England Journal of Medicine, 371(24):2298– 

2308. 

62Polyakova, M., et al. (2021). Racial disparities 

in excess all-cause mortality during the early 

COVID–19 pandemic varied substantially across 

states. Health Affairs, 40(2): 307–316. 

63Rural Health Research Gateway. (2018). Rural 

communities: age, income, and health status. Rural 

Health Research Recap. https://www.ruralhealth

research.org/assets/2200-8536/rural-communitiesage-incomehealth-status-recap.pdf. 

64https://www.minorityhealth.hhs.gov/assets/ 

PDF/Update_HHS_Disparities_Dept-FY2020.pdf. 

65www.cdc.gov/mmwr/volumes/70/wr/ 

mm7005a1.htm. 

66Milkie Vu et al. Predictors of Delayed 

Healthcare Seeking Among American Muslim 

Women, Journal of Women’s Health 26(6) (2016) at 

58; S.B. Nadimpalli, et al., The Association between 

Discrimination and the Health of Sikh Asian 

Indians Health Psychol. 2016 Apr; 35(4): 351–355. 

67Poteat TC, Reisner SL, Miller M, Wirtz AL. 

(2020). COVID–19 vulnerability of transgender 

women with and without HIV infection in the 

Eastern and Southern U.S. preprint. medRxiv. 

2020;2020.07.21. 20159327. doi:10.1101/ 

2020.07.21.20159327. 

68 86 FR 7009 (January 25, 2021); https://

www.whitehouse.gov/briefing-room/presidentialactions/2021/01/20/executive-order-advancingracial-equity-and-support-for-underservedcommunities-through-the-federal-government/. 

69https://www.cms.gov/pillar/health-equity. 

70https://www.cms.gov/About-CMS/AgencyInformation/OMH/OMH-Mapping-MedicareDisparities. 71https://innovation.cms.gov/innovation-models/ 

ahcm. 72https://qualitynet.cms.gov/inpatient/measures/ 

disparity-methods. 73https://www.cms.gov/Medicare/QualityInitiatives-Patient-Assessment-Instruments/PostAcute-Care-Quality-Initiatives/IMPACT-Act-of2014/-IMPACT-Act-Standardized-PatientAssessment-Data-Elements. 74https://www.cms.gov/sites/default/files/2022- 

04/CMS%20Framework%20for%20Health

%20Equity_2022%2004%2006.pdf. 75Office of the Assistant Secretary for Planning 

and Evaluation, U.S. Department of Health & 

Human Services. Second Report to Congress on 

Social Risk Factors and Performance in Medicare’s 

Value-Based Purchasing Program. 2020. https://

aspe.hhs.gov/social-risk-factors-and-medicaresvalue-basedpurchasing-programs. 

outcomes.59 60 61 62 63 64 65 66 67 In line with 

Executive Order 13985 of January 20, 

2021, ‘‘Advancing Racial Equity and 

Support for Underserved Communities 

Through the Federal Government’’,68

CMS defines health equity as the 

attainment of the highest level of health 

for all people, where everyone has a fair 

and just opportunity to attain their 

optimal health regardless of race, 

ethnicity, disability, sexual orientation, 

gender identity, socioeconomic status, 

geography, preferred language, or other 

factors that affect access to care and 

health outcomes.69 We are working to 

advance health equity by designing, 

implementing, and operationalizing 

policies and programs that support 

health for all the people served by our 

programs, eliminating avoidable 

differences in health outcomes 

experienced by people who are 

disadvantaged or underserved, and 

providing the care and support that our 

enrollees need to thrive. Over the past 

decade we have established a suite of 

programs and policies aimed at 

reducing health care disparities 

including the CMS Mapping Medicare 

Disparities Tool,70 the CMS Innovation 

Center’s Accountable Health 

Communities Model,71 the CMS 

Disparity Methods stratified reporting 

program,72 and efforts to expand social 

risk factor data collection, such as the 

collection of Standardized Patient 

Assessment Data Elements in the postacute care setting,73 and the CMS 

Framework for Health Equity 2022– 

2023.74

As we continue to leverage our valuebased purchasing initiatives to improve 

the quality of care furnished across 

healthcare settings, we are interested in 

exploring the role of health equity in 

creating better health outcomes for all 

populations in our programs and 

models. As the March 2020 Assistant 

Secretary for Planning and Evaluation 

(ASPE) Report to Congress on Social 

Risk Factors and Performance in 

Medicare’s Value-Based Purchasing 

Program notes, it is important to 

implement strategies that cut across all 

programs and health care settings to 

create aligned incentives that drive 

providers to improve health outcomes 

for all beneficiaries.75 We are interested 

in stakeholder feedback on specific 

actions the expanded HHVBP Model 

can take to address healthcare 

disparities and advance health equity. 

As we continue to develop policies 

for the expanded HHVBP Model, we are 

requesting public comments on policy 

changes that we should consider on the 

topic of health equity. We specifically 

request comments on whether we 

should consider incorporating 

adjustments into the expanded HHVBP 

Model to reflect the varied patient 

populations that HHAs serve around the 

country and tie health equity outcomes 

to the payment adjustments we make 

based on HHA performance under the 

Model. These adjustments could be 

made at the measure level in forms such 

as stratification (for example, based on 

dual status or other metrics), or we 

could propose to adopt new measures of 

social determinants of health (SDOH). 

These adjustments could also be 

incorporated at the scoring level in 

forms such as modified benchmarks, 

points adjustments, or modified 

payment adjustment percentages (for 

example, peer comparison groups based 

on whether the HHA includes a high 

proportion of dual eligible beneficiaries 

or other metrics). We request 

commenters’ views on which of these 

adjustments, if any, would be most 

effective for the expanded HHVBP 

Model. 

V. Home Infusion Therapy Services: 

Annual Payment Updates for CY 2023 

In accordance with section 1834(u)(3) 

of the Act and 42 CFR 414.1550, our 

national home infusion therapy (HIT) 

services payment rates for the initial 

and subsequent visits in each of the 

home infusion therapy payment 

categories for CY 2023 are required to be 

the CY 2022 rate adjusted by the 

percentage increase in the Consumer 

Price Index (CPI) for all urban 

consumers (United States city average) 

for the 12 month period ending with 

June of the preceding year reduced by 

a productivity adjustment described in 

section 1886(b)(3)(B)(xi)(II) of the Act as 

the 10-year moving average of changes 

in annual economy-wide private 

nonfarm business multifactor 

productivity. Section 1834(u)(3) of the 

Act further states that the application of 

the productivity adjustment may result 

in a percentage being less than 0.0 for 

a given year, and may result in payment 

being less than such payment rates for 

the preceding year. We note that 

§ 414.1550(d) does not permit any 

exercise of discretion by the Secretary. 

The single payment amounts are also 

adjusted for geographic area wage 

differences using the geographic 

adjustment factor (GAF). We remind 

stakeholders that the GAFs are a 

weighted composite of each Physician 

Fee Schedule (PFS) localities work, 

practice expense (PE) and malpractice 

(MP) expense geographic practice cost 

indices (GPCIs). The periodic review 

and adjustment of the GPCIs is 

mandated by section 1848(e)(1)(C) of the 

Act. At each update, the proposed 

GPCIs are published in the PFS 

proposed rule to provide an opportunity 

for public comment and further 

revisions in response to comments prior 

to implementation. The GPCIs and the 

GAFs are updated triennially with a 2 

year phase in and were last updated in 

the CY 2020 PFS final rule 


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76Home Infusion Therapy Services Billing and 

Rates. https://www.cms.gov/medicare/homeinfusion-therapy-services/billing-and-rates. 

77As estimated by CMS analysis of payor source 

indicators in CY20 HH Cost report data compared 

to the CY20 HH OASIS data file. 

(84 FR 62568). The next full update to 

the GPCIs and the GAFs will be 

proposed in the CY 2023 PFS proposed 

rule. The CY 2023 PFS proposed rule 

and the CY 2023 proposed GAFs will be 

available on the PFS website at https:// 

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

after publication in the Federal 

Register. 

The updated GAFs, national home 

infusion therapy payment rates, and 

locality-adjusted home infusion therapy 

payment rates will be posted on CMS’ 

Home Infusion Therapy Services web 

page 76 once these rates are finalized. In 

the future, we will no longer include a 

section in the HH PPS rule on home 

infusion therapy if no changes are being 

proposed to the payment methodology. 

Instead, the rates will be updated each 

year in a Change Request and posted on 

the website. For more in-depth 

information regarding the finalized 

policies associated with the scope of the 

home infusion therapy services benefit 

and conditions for payment, we refer 

readers to the CY 2020 HH PPS final 

rule with comment period (84 FR 

60544). 

VI. Collection of Information 

Requirements 

A. Statutory Requirement for 

Solicitation of Comments 

Under the Paperwork Reduction Act 

of 1995, we are required to provide a 60- 

day notice in the Federal Register and 

solicit public comment before a 

collection of information requirement is 

submitted to the Office of Management 

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. 

In this proposed rule, we are 

soliciting public comment on each of 

these issues for the following sections of 

this document that contain information 

collection requirements (ICRs). 

B. Collection of Information 

Requirement 

1. ICRs for HH QRP 

In section III. of this proposed rule, 

we are proposing to end the suspension 

of the collection of OASIS data on nonMedicare and non-Medicaid patients 

and to require HHAs to submit all-payer 

OASIS data for purposes of the HH QRP, 

beginning with the CY 2025 program 

year. We believe that the burden 

associated with this proposal is the time 

and effort associated with the 

submission of non-Medicare and nonMedicaid OASIS data. The submission 

of OASIS data on HH patients regardless 

of payor source will ensure that CMS 

can appropriately assess the quality of 

care provided to all patients receiving 

skilled care by all Medicare-certified 

HHAs that participate in the HH QRP. 

As of January 1, 2022, there are 

approximately 11,354 HHAs reporting 

OASIS data to CMS under the HH QRP. 

The OASIS is completed by RNs or 

PTs, or very occasionally by 

occupational therapists (OT) or speech 

language pathologists (SLP/ST). Data 

from 2020 show that the SOC/ROC 

OASIS is completed by RNs 

(approximately 76.50 percent of the 

time), PTs (approximately 20.78 percent 

of the time), and other therapists, 

including OTs and SLP/STs 

(approximately 2.72 percent of the 

time). Based on this analysis, we 

estimated a weighted clinician average 

hourly wage of $79.41, inclusive of 

fringe benefits, using the hourly wage 

data in Table F1. Individual providers 

determine the staffing resources 

necessary. 

For purposes of calculating the costs 

associated with the information 

collection requirements, we obtained 

mean hourly wages for these from the 

U.S. Bureau of Labor Statistics’ May 

2020 National Occupational 

Employment and Wage Estimates 

(https://www.bls.gov/oes/current/ 

oes_nat.htm). To account for overhead 

and fringe benefits (100 percent), we 

have doubled the hourly wage. These 

amounts are detailed in Table F1. 

We estimate that this proposed new 

requirement would result in HHAs 

having to increase by 30 percent the 

number of assessments they complete at 

each timepoint, with a corresponding 30 

percent increase in their estimated 

hourly burden and estimated clinical 

cost.77 For purposes of estimating 

burden, we utilize item-level burden 

estimates for OASIS–E that will be 

released January 1, 2023. 

Table F2 shows the total number of 

OASIS assessments that HHAs actually 

completed in CY 2020, as well as how 

those numbers would have increased if 

non-Medicare and non-Medicaid OASIS 

assessments had been required at that 

time. 


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TABLE Fl: U.S. BUREAU OF LABOR STATISTICS' MAY 2020 NATIONAL 

OCCUPATIONAL EMPLOYMENT AND WAGE ESTIMATES 

Mean Fringe 

Hourly Benefit 

Occupation Wage (11l0%) 

Occuuation Title Code ($/hr) ($/hr) 

Recistered Nurse (RN) 29-1141 $38.47 $38.47 

Phvsical theraoists HHAs 29-1123 $44.08 $44.08 

Soeech-Lamruage Pathologists (SLP) 29-1127 $40.02 $40.02 

Occuoational Theraoists <On 29-1122 $42.06 $42.06 

Medical Dosimetrists, Medical Records Specialists, and Health Technologists and Technicians 29-2098 $23.21 $23.21 

Adjusted 

Hourly 

Wage 

($/hr) 

$76.94 

$88.16 

$80.04 

$84.12 

$46.42 
37674 Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 

Table F3 summarizes the estimated 

clinician hourly burden for Medicare 

only, non Medicare, and all-payer 

patients receiving HH care for each 

OASIS assessment type using CY 2020 

assessment totals. 

The calculations we used to estimate 

the total all-payer hourly burden with 

CY 2020 assessment totals and OASISE data elements at each time point of 

OASIS data collection are as follows: 

Start of Care 

Estimated Time Spent per Each OASISE SOC Assessment/Patient = 57.3 

Clinician Minutes 

203 data elements × 0.15¥0.3 minutes 

per data element = 57.3 minutes of 

clinical time spent to complete data 

entry for the OASIS-E SOC 

assessment. 

• 21 DE counted as 0.15 minutes/DE 

(3.15) 

• 9 DE counted as 0.25 minutes/DE 

(2.25) 

• 173 DE counted as 0.30 minutes/DE 

(51.9) 

Clinician Estimated Hourly Burden for 

All HHAs (11,354) for OASIS-E SOC 

Assessments = 7,937,363 Hours 

57.3 clinician minutes per SOC 

assessment × 8,311,375 assessments 

= 476,241,787 minutes/60 minutes 

per hour = 7,937,363 hours for all 

HHAs 

Resumption of Care 

Estimated Time Spent per Each OASISD ROC Assessment/Patient = 48 Minutes 

172 data elements × 0.15¥0.3 minutes 

per data element = 48 minutes of 

clinical time spent to complete data 

entry for the OASIS-D ROC 

assessment 

• 21 DE counted as 0.15 minute/DE 

(3.15) 

• 9 DE counted as 0.25 minute/DE 

(2.25) 

• 142 DE counted as 0.30 minute/DE 

(42.6) 

Clinician Estimated Hourly Burden for 

All HHAs for OASIS-E ROC 

Assessments = 968,146 Hours 

48 clinician minutes per ROC 

assessment × 1,210,183 ROC 

assessments = 58,088,784 minutes/ 

60 minutes = 968,146 hours for all 

HHAs 

Follow Up 

Estimated Time Spent per Each OASISE FU Assessment/Patient = 11.1 Minutes 

37 data elements × 0.3 minutes per data 

element = 11.1 minutes of clinical 

time spent to complete data entry 

for the OASIS-D FU assessment. 

• 37 DE counted as 0.30 minutes/DE 

Clinician Estimate Hourly Burden for 

All HHAs for OASIS-E FU Assessments 

= 878,532 Hours 

11.1 clinician minutes for OASIS-E FU 

assessments × 4,748,822 FU 

assessments = 52,711,924 minutes/ 

60 minutes = 878,532 hours for all 

HHAs 

Transfer of Care 

Estimated Time Spent per Each OASISE TOC Assessment/Patient = 6.6 

Minutes 

22 data elements × 0.15¥0.3 minutes 

per data element = 6.6 minutes of 

clinical time spent to complete data 

entry for the OASIS-D TOC 

assessment 

• 22 DE counted as 0.30 minutes/DE 


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TABLE Fl. CY 2020 OASIS SUBMISSIONS BY TIME POINT 

CY 2020 Assessments 

Completed for Non- CY 2020 Assessments 

CY 2020 Assessments Medicare/Medicaid Completed for all Payer 

Time Point Comoleted Patients Sources 

Start of Care 6.393.366 L918om 8 311 375 

Resumntion of Care 930.910 279 21~ 1210 183 

Follow-up 3,652.940 1,095 88~ 4 748 822 

Transfer to an innatient facilitv 1.796.827 539 04~ 2 335 875 

Death at Home 50.493 15 14 65 640 

Dischan!:e from agencv 5,206.230 1,561,86( 6 768,099 

TOTAL 18.030766 5.409 22l 23 439 994 

TABLE F3. SUMMARY OF ESTIMATED CLINICIAN HOURLY BURDEN 

Clinician Estimated Hourly Clinician Estimated Clinician Estimated 

OASIS Assessment Burden- Hourly Burden - Hourly Burden - All 

Tvoe Medicare/Medicaid Onlv Non-Medicare/Medicaid Paver 

soc 6,105,664 1,831,699 7,937,363 

ROC 744,728 223,418 968,146 

FU (Follow Up) 675,793 202,739 878,532 

TOC (Transfer of 197,650 59,291 256,946 Care) 

DAH (Death at 2,272 681 2,953 Home) 

DC (Discharge) 3,488,174 1,046,452 4,534,626 

TOTAL 11,214,281 3,364,285 14,578,566 
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Clinician Estimated Hourly Burden for 

All HHAs for OASIS-E TOC 

Assessments = 256,946 Hours 

6.6 clinician minutes × 2,335,875 TOC 

assessments = 15,416,775 minutes/ 

60 minutes = 256,946 hours 

Death at Home 

Estimated Time Spent per Each OASISE DAH Assessment/Patient = 2.7 

Minutes 

9 data elements × 0.15¥0.3 minutes per 

data element = 2.7 minutes of 

clinical time spent to complete data 

entry for the OASIS-E DAH 

assessment. 

• 9 DE counted as 0.30 minutes/DE 

Clinician Estimated Hourly Burden for 

All HHAs for OASIS-E DAH 

Assessments = 2,953 Hours 

2.7 clinician minutes × 65,640 DAH 

assessments = 177,228 minutes/60 

minutes = 2,954 hours 

Discharge 

Estimated Time Spent per Each OASISE DC Assessment/Patient = 40.2 Minutes 

146 data elements × 0.15¥0.3 minutes 

per data element = 40.2 minutes of 

clinical time spent to complete data 

entry for the OASIS-E DC 

assessment. 

• 21 DE counted as 0.15 minutes/DE 

• 9 DE counted as 0.25 minutes/DE 

• 116 DE counted as 0.30 minutes/DE 

Clinician Estimated Hourly Burden for 

All HHAs for OASIS-E DC Assessments 

= 4,534,626 Hours 

40.2 clinician minutes × 6,768,099 DC 

assessments = 272,077,580 minutes/ 

60 minutes = 4,534,626 hours 

Table F4 summarizes the estimated 

clinician costs for the completion of the 

OASIS-E assessment tool for Medicare 

only, Non-Medicare, and All-Payer 

patients receiving HH care for each 

OASIS assessment type using CY2020 

assessment and cost data. 

Outlined later are the calculation for 

estimates used to derive total all-payer 

costs with OASIS E data elements for 

each OASIS assessment type using 

CY2020 assessment and cost data: 

Start of Care 

Estimated Cost for All HHAs for OASISE SOC Assessments = $630,305,995.83 

for All HHAs 

$79.41/hour × 7,937,363 hours for all 

HHAs = $630,305,995.83 for all 

HHAs 

Resumption of Care 

Estimated Cost for All HHAs for OASISE ROC Assessments = $76,880,473.86 

for All HHAs 

$79.41/hour × 968,146 hours = 

$76,880,473.86 for all HHAs 

Follow Up 

Estimated Costs for All HHAs for 

OASIS-E FU Assessments = 

$82,962,803.4 for All HHAs 

$79.41/hour × 878,532hours = 

$69,764,226 for all HHAs 

Transfer of Care 

Estimated costs for All HHAs for All 

OASIS-E TOC Assessments = 

$20,404,081.86 for All HHAs 

$79.41/hour × 256,946 hours = 

$20,404,081.86 for All HHAs 

Death at Home 

Estimated Costs for all HHAs for OASISE DAH Assessments = $234,497.73 for 

All HHAs 

$79.41 × 2,953 hours = $234,497.73 for 

all HHAs 

Discharge 

Estimated costs for All HHAs for OASISE DC Assessments = $360,094,650.66 for 

all HHAs 

$79.41/hour × 4,534,626 hours = 

$360,094,650.66 for all HHAs 

Based on the data in Tables F1 to F3 

for the 11,354 active Medicare-certified 

HHAs, we estimate the total increase in 

costs associated with the changes in the 

HH QRP to be approximately 23,529.82 

per HHA annually or $267,157,680.3 all 

HHAs. This corresponds to an estimated 

increase in clinician burden associated 

with the changes to the HH QRP of 

approximately 296.3 hours per HHA or 

approximately 3,364,285 hours for all 

HHAs. This additional burden would 

begin with January 1, 2024 HHA 

discharges. We have also included a 

request for information (RFI) related to 

potentially applying health equity to the 

expanded HHVBP Model in the future. 

Section 1115A(d)(3) of the Act exempts 

Innovation Center model tests and 

expansions, which include the 

expanded HHVBP Model, from the 

provisions of the PRA. Specifically, this 

section provides that the provisions of 

the PRA do not apply to the testing and 

evaluation of Innovation Center models 

or to the expansion of such models. 

C. 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 

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–1766–P) and, where 

applicable, the preamble section, and 

the ICR section. See this rule’s DATES

and ADDRESSES sections for the 


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TABLE F4. SUMMARY OF ESTIMATED CLINICIAN COSTS 

Clinician Estimated 

OASIS CostAssessment Medicare/Medicaid Clinician Estimated Cost- Clinician Estimated 

Type Only Non-Medicare/Medicaid Cost - All Payer 

soc $484,850 778.24 145 455,217.59 $630,305 995.83 

ROC $59,138 850.48 $17 741,623.38 $76.880 473.86 

FU 53 664 793.6 16 099.432.5 $69 764 226.1 

TOC _$_15,695 483.53 $4 708,598.33 $20,404 081.86 

DAH $180 434.61 $54,063.12 $234 497.73 

DC $276.995 905.28 $83 098.745.38 $360.094 650.66 

TOTAL $837.526 245.74 $267.157 680.3 $1 104.683 926.04 
37676 Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 

comment due date and for additional 

instructions. 

VII. Regulatory Impact Analysis 

A. Statement of Need 

1. 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 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 requires the 

standard prospective payment amount 

be adjusted for case-mix and geographic 

differences in wage levels. Section 

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

establishment of appropriate case-mix 

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. 

Sections 1895(b)(2) and 1895(b)(3)(A) 

of the Act, as amended by section 

51001(a)(1) and 51001(a)(2) of the BBA 

of 2018 respectively, required the 

Secretary to implement a 30-day unit of 

service, for 30-day periods beginning on 

and after January 1, 2020. The HH PPS 

wage index utilizes the wage adjustment 

factors used by the Secretary for 

purposes of sections 1895(b)(4)(A)(ii) 

and (b)(4)(C) of the Act for hospital 

wage adjustments. 

2. HH QRP 

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

authorizes the HH QRP, which requires 

HHAs to submit data in accordance with 

the requirements specified by CMS. 

Failure to submit data required under 

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

respect to a program year will result in 

the reduction of the annual home health 

market basket percentage increase 

otherwise applicable to an HHA for the 

corresponding calendar year by 2 

percentage points. 

3. Expanded HHVBP Model 

In the CY 2022 HH PPS final rule (86 

FR 62292 through 62336) and codified 

at 42 CFR part 484, subpart F, we 

finalized our policy to expand the 

HHVBP Model to all Medicare certified 

HHAs in the 50 States, territories, and 

District of Columbia beginning January 

1, 2022. CY 2022 was designated as a 

pre-implementation year during which 

CMS will provide HHAs with resources 

and training. This pre-implementation 

year as intended to allow HHAs time to 

prepare and learn about the 

expectations and requirements of the 

expanded HHVBP Model without risk to 

payments. 

We also finalized that the expanded 

Model will use a baseline year to 

establish the benchmarks and 

achievement thresholds for each cohort 

on each measure for HHAs. The baseline 

year is currently 2019. In this rule, we 

are proposing to establish a separate 

HHA baseline year to determine HHA 

improvement thresholds by measure for 

each individual agency to assess 

achievement or improvement of HHA 

performance on applicable quality 

measures. As codified at § 484.350(b), 

for an HHA that is certified by Medicare 

on or after January 1, 2019, the baseline 

year is the first full calendar year of 

services beginning after the date of 

Medicare certification, with the 

exception of HHAs certified on January 

1, 2019, through December 31, 2019, for 

which the baseline year is calendar year 

(CY) 2021, and the first performance 

year is the first full calendar year 

(beginning with CY 2023) following the 

baseline year. As discussed in that final 

rule, we stated that we may conduct 

analyses of the impact of using various 

baseline periods and consider any 

changes for future rulemaking. 

Due to the continuation of the 

COVID–19 PHE through CY 2021 and its 

effects on the quality measures in the 

expanded HHVBP Model used to 

determine payment adjustments for 

eligible HHAs (as described in section 

IV.B.2.b. of this proposed rule), we 

believe an HHA’s baseline year that 

would be CY 2021 should be adjusted 

to CY 2022. This policy aligns with 

similar proposals in the Hospital VBP 

and SNF VBP Programs to account for 

the continued effects of the PHE on 

measures in 2021. Additionally, 

amending the HHA baseline year (and 

defining this term) for HHAs certified 

prior to 2022 starting in the CY 2023 

performance year as well as changing 

the Model baseline year (and defining 

this term) to CY 2022 starting in the CY 

2023 performance year allows eligible 

HHAs to be scored on measure data that 

is more current and is intended to 

compare HHAs to a base year that is 2 

years after the peak of the pandemic. 

4. Medicare Coverage of Home Infusion 

Therapy 

Section 1834(u)(1) of the Act, as 

added by section 5012 of the 21st 

Century Cures Act, requires the 

Secretary to establish a home infusion 

therapy services payment system under 

Medicare. This payment system requires 

a single payment to be made to a 

qualified home infusion therapy 

supplier for items and services 

furnished by a qualified home infusion 

therapy supplier in coordination with 

the furnishing of home infusion drugs. 

Section 1834(u)(1)(A)(ii) of the Act 

states that a unit of single payment is for 

each infusion drug administration 

calendar day in the individual’s home. 

The Secretary shall, as appropriate, 

establish single payment amounts for 

types of infusion therapy, including to 

consider variation in utilization of 

nursing services by therapy type. 

Section 1834(u)(1)(A)(iii) of the Act 

provides a limitation to the single 

payment amount, requiring that it shall 

not exceed the amount determined 

under the Physician Fee Schedule 

(under section 1848 of the Act) for 

infusion therapy services furnished in a 


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calendar day if furnished in a physician 

office setting, except such single 

payment shall not reflect more than 5 

hours of infusion for a particular 

therapy in a calendar day. Section 

1834(u)(1)(B)(i) of the Act requires that 

the single payment amount be adjusted 

by a geographic wage index. Finally, 

section 1834(u)(1)(C) of the Act allows 

for discretionary adjustments which 

may include outlier payments and other 

factors as deemed appropriate by the 

Secretary, and are required to be made 

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 percentage 

increase in the CPI-U for all urban 

consumers for the 12 month period 

ending with June of the preceding year, 

reduced by the 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. 

Finally, Division N, section 101 of CAA 

2021 amended section 1848(t)(1) of the 

Act and modified the CY 2021 PFS rates 

by providing a 3.75 percent increase in 

PFS payments only for CY 2021. 

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 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), and the 

Congressional Review Act (5 U.S.C. 

804(2)) 

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. Therefore, we estimate that this 

rule 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 presents our best estimate 

of the costs and benefits of this rule. 

C. Detailed Economic Analysis 

This rule proposes updates to 

Medicare payments under the HH PPS 

for CY 2023. The net transfer impact 

related to the changes in payments 

under the HH PPS for CY 2023 is 

estimated to be ¥$810 million (¥4.2 

percent). The $810 million decrease in 

estimated payments for CY 2023 reflects 

the effects of the proposed CY 2023 

home health payment update percentage 

of 2.9 percent ($560 million increase), 

an estimated 6.9 percent decrease that 

reflects the effects of the permanent 

behavioral adjustment ($1.33 billion 

decrease) and an estimated 0.2 percent 

decrease that reflects the effects of an 

updated FDL ($40 million decrease). 

We use the latest data and analysis 

available, however, we do not adjust for 

future changes in such variables as 

number of visits or case-mix. This 

analysis incorporates the latest 

estimates of growth in service use and 

payments under the Medicare home 

health benefit, based primarily on 

Medicare claims data for periods that 

ended on or before December 31, 2021. 

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 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. 

Table F5 represents how HHA 

revenues are likely to be affected by the 

finalized policy changes for CY 2023. 

For this analysis, we used an analytic 

file with linked CY 2021 OASIS 

assessments and home health claims 

data for dates of service that ended on 

or before December 31, 2021. The first 

column of Table F5 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 permanent behavioral adjustment 

on all payments. The fourth column 

shows the payment effects of the 

recalibration of the case-mix weights 

offset by the case-mix weights budget 

neutrality factor. The fifth column 

shows the payment effects of updating 

to the CY 2023 wage index with a 5- 

percent cap on wage index decreases. 

The sixth column shows the payment 

effects of the final CY 2023 home health 

payment update percentage. The 

seventh column shows the payment 

effects of the new FDL, and the last 

column shows the combined effects of 

all the finalized provisions. 

Overall, it is projected that aggregate 

payments in CY 2023 would decrease by 

4.2 percent which reflects the 6.9 

percent decrease from the permanent 

behavioral adjustment, the 2.9 payment 

update percentage increase, and the 0.2 

percent decrease from increasing the 

FDL. As illustrated in Table F5, the 

combined effects of all of the changes 

vary by specific types of 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 2023 

wage index, the percentage of total HH 

PPS payments that were subject to the 

LUPA or paid as outlier payments, and 

the degree of Medicare utilization. 

BILLING CODE 4120–01–P 


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TABLE FS: ESTIMATED HHA IMPACTS BY FACILITY TYPE AND AREA OF THE 

COUNTRY, CY 2023 

CY2023 

Updated CY2023 

CY 2023 Case- Wage Proposed 

J.\,lix Weights Index HH Fixedl'iumber Pennanent Recalibration with Payment Dollar Loss 

of BA Neutrality 5-Percent Update2 (FDL) 

Ae:encics Adjustment' Factor Cap Pcrccntal!C Update 

All Al!encies 9,461 -6.9% 0.0% 0.0% 2.9% -0.2% 

Facility Type and Control 

Freestanding/Other Vol/NP 928 -6.7% 0.1% -0.5% 2.9% -0.2% 

Freestanding/Other Proprietary 7,703 -7.0% -0.1% 0.2% 2.9% -0.2% 

Freestanding/Other Government 172 -6.8% 0.3% 0.1% 2.9% -0.2% 

Facility-Based Vol/NP 466 -6.5% 0.2% -0.4% 2.9% -0.3% 

Facility-Based Proprietary 48 -6.9% 0.1% -0.2% 2.9% -0.2% 

Facility-Based Government 144 -6.8% 0.2% 0.1% 2.9% -0.2% 

Subtotal: Freestanding 8,803 -7.0% 0.0% 0.1% 2.9% -0.2% 

Subtotal: Facility-based 658 -6.6% 0.2% -0.3% 2.9% -0.3% 

Subtotal: Vol/NP 1,394 -6.7% 0.2% -0.4% 2.9% -0.3% 

Subtotal: Pmnrietarv 7,751 -7.0% -0.1% 0.2% 2.9% -0.2% 

Subtotal: Government 316 -6.8% 0.2% 0.1% 2.9% -0.2% 

Facilitv Tvpe and Control: Rural 

Freestanding/Other Vol/NP 221 -6.8% 0.2% -0.4% 2.9% -0.2% 

Freestanding/Other Proorietarv 785 -7.2% 0.0% 1.3% 2.9% -0.1% 

Freestanding/Other Government 118 -6.7% 0.3% 0.3% 2.9% -0.3% 

Facility-Based Vol/NP 204 -6.6% 0.3% -0.3% 2.9% -0.3% 

Facility-Based Proorietarv 16 -7.3% 0.2% 0.4% 2.9% -0.1% 

Facility-Based Government 107 -6.7% 0.4% 0.6% 2.9% -0.3% 

Facility Type and Control: Urban 

Freestanding/Other Vol/NP 707 -6.7% 0.1% -0.5% 2.9% -0.2% 

Free-Standin~Other Proprietarv 6,918 -7.0% -0.1 o/o 0.0% 2.9% -0.2% 

Free-Standing/Other Government 54 -6.9% 0.3% -0.1% 2.9% -0.2% 

Facility-Based Vol/NP 262 -6.5% 0.2% -0.4% 2.9% -0.3% 

Facility-8ased Proorietarv 32 -6.8% 0.1 o/o -0.3% 2.9% -0.2% 

Facility-Based Government 37 -6.9% 0.0% -0.2% 2.9% -0.2% 

Facilitv Location: Urban or Rural 

Rural 1,451 -7.0% 0.1 o/o 0.8% 2.9% -0.2% 

Urban 8,010 -6.9% 0.0% -0.1% 2.9% -0.2% 

Facility Location: Region of the Country 

(Census Rel!i.on) 

New England 327 -6.7% 0.1 o/o -1.0% 2.9% -0.3% 

Mid Atlantic 413 -6.8% 0.2% -0.4% 2.9% -0.2% 

East North Central 1,553 -6.9% -0.1% -0.5% 2.9% -0.2% 

West North Central 610 -6.7% -0.1% -0.6% 2.9% -0.3% 

South Atlantic 1,568 -7.0% 0.0% -0.5% 2.9% -0.2% 

East South Central 363 -7.2% 0.0% 1.1% 2.9% -0.1% 

West South Central 2,128 -7.0% 0.0% 1.2% 2.9% -0.2% 

Mountain 693 -6.8% -0.1% -0.3% 2.9% -0.2% 

Pacific 1,763 -6.9% 0.0% 0.5% 2.9% -0.2% 

Outlying 43 -7.0% 1.1% -0.5% 2.9% -0.2% 

Facility Size (Number of 30-day Periods) 

< 100 periods 2,016 -6.9% 0.2% -0.1% 2.9% -0.2% 

100 to249 1,380 -6.9% 0.2% 0.1% 2.9% -0.2% 

250 to499 1,671 -6.9% 0.0% 0.2% 2.9% -0.2% 

500 to 999 1,912 -6.9% -0.1% 0.2% 2.9% -0.2% 

1,000 or More 2,482 -6.9% 0.0% 0.0% 2.9% -0.2% 

Total 

-4.2% 

-4.5% 

-4.2% 

-3.7% 

-4.1% 

-4.3% 

-3.8% 

-4.1% 

-4.1% 

-4.2% 

-4.2% 

-3.8% 

-4.3% 

-3.1% 

-3.4% 

-4.0% 

-3.9% 

-3.1% 

-4.5% 

-4.4% 

-4.0% 

-4.1% 

-4.3% 

-4.4% 

-3.4% 

-4.3% 

-5.0% 

-4.3% 

-4.8% 

-4.7% 

-4.8% 

-3.3% 

-3.1% 

-4.6% 

-3.7% 

-3.7% 

-4.1% 

-3.9% 

-4.0% 

-4.1% 

-4.2% 
Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 37679 

BILLING CODE 4120–01–C 

2. Impacts for the HH QRP for CY 2023 

Failure to submit HH QRP data 

required under section 1895(b)(3)(B)(v) 

of the Act with respect to a program 

year will result in the reduction of the 

annual home health market basket 

percentage increase otherwise 

applicable to an HHA for the 

corresponding calendar year by 2 

percentage points. For the CY 2022 

program year, 1,169 of the 11,128 active 

Medicare-certified HHAs, or 

approximately 10.4 percent, did not 

receive the full annual percentage 

increase because they did not meet 

assessment submission requirements. 

The 1,169 HHAs that did not satisfy the 

reporting requirements of the HH QRP 

for the CY 2022 program year represent 

$437 million in home health claims 

payment dollars during the reporting 

period out of a total $17.3 billion for all 

HHAs. 

As discussed in section III. of this 

proposed rule, we are proposing to end 

the temporary suspension of nonMedicare/Medicaid data under section 

704 of the Medicare Prescription Drug, 

Improvement, and Modernization Act of 

2003 and, in accordance with section 

1895(b)(3)(B)(v) of the Act, to require 

HHAs to report all-payer OASIS data for 

purposes of the HH QRP, beginning 

with the CY 2025 program year. 

Section III. of this proposed rule 

provides a detailed description of the 

net increase in burdens associated with 

these proposed changes. We are 

proposing that HHAs would be required 

to begin reporting all-payer OASIS data 

beginning with January 1, 2024, 

discharges. The cost impact of this 

proposal is estimated to be a net 

increase of $267,157,680.3 in 

annualized cost to HHAs, discounted at 

7 percent relative to year 2020, over a 

perpetual time horizon beginning in CY 

2025. We described the estimated 

burden and cost reductions for these 

measures in section V1V1.B.1. of this 

proposed rule. In summary, the 

submission of data on non-Medicare/ 

Medicaid patients for the HH QRP is 

estimated to increase the burden on 

HHAs to $23,529.82 per HHA annually, 

or $267,157,680.3 for all HHAs 

annually. 

3. Impacts for the Expanded HHVBP 

Model 

In the CY 2022 HHPPS final rule (86 

FR 62402 through 62410), we estimated 

that the expanded HHVBP Model would 

generate a total projected 5-year gross 

FFS savings, CYs 2023 through 2027, of 

$3,376,000,000. The proposed changes 

to the baseline years in this proposed 

rule will not change those estimates 

because they do not change the number 

of HHAs in the Model or the payment 

methodology. 

4. Impact of the CY 2023 Payment for 

Home Infusion Therapy Services 

There are no new proposals in this 

rule related to payments for home 

infusion therapy services in CY 2023. 

The CY 2023 home infusion therapy 

service payments will be updated by the 

CPI-U reduced by the productivity 

adjustment and geographically adjusted 

in a budget neutral manner using the 

GAF standardization factor. The CY 

2023 final GAF values (and the CPI-U as 

of June 2022) were not available at the 

time of rulemaking, therefore, we are 

unable to estimate the impact of these 

adjustments on the CY 2023 HIT service 

payment amounts compared to the CY 

2022 HIT service payment amounts. 

D. Regulatory Review Cost Estimation 

If regulations impose administrative 

costs on private entities, such as the 

time needed to read and interpret this 

proposed or final rule, we should 

estimate the cost associated with 

regulatory review. Due to the 

uncertainty involved with accurately 

quantifying the number of entities that 

will review the rule, we assume that the 

total number of unique commenters on 

last year’s proposed rule will be the 

number of reviewers of this 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 last 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 seek 

comments on the approach used in 

estimating the number of entities 

reviewing 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 $115.22 per hour, 

including overhead and fringe benefits 

https://www.bls.gov/oes/current/ 

oes_nat.htm. Assuming an average 

reading speed, we estimate that it would 

take approximately 2.32 hours for the 

staff to review half of this proposed rule. 

For each entity that reviews the rule, the 

estimated cost is $267 (2.32 hours × 

$115.22). Therefore, we estimate that 

the total cost of reviewing this 

regulation is $ 55,269 ($267 × 207) [207 


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Source: CY 2021 Medicare claims data for periods with matched OASIS records ending in CY2021 (as of March 21, 2022). 

Notes: 

I.The permanent BA adjustment impact reflected in column 3 does not equal the proposed 7.69% permanent BA adjustment. The 6.9% reflected 

in column 3 includes all payments while the proposed 7.69% BA adjustment only applies to the national, standardized 30-Day period payments 

and does not impact payments for 30-day periods which are LUP As. 

2.The CY 2023 home health payment update percentage reflects the home health productivity adjusted market basket update of2.9 percent as 

described in section 11.B.3.a ofthis 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 
37680 Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 

78Home Health Services. MedPAC Report to 

Congress- 2022. https://www.medpac.gov/wpcontent/uploads/2022/03/Mar22_MedPAC_ReportToCongress_Ch8_SEC.pdf. 

is the number of estimated reviewers, 

which is based on the total number of 

unique commenters from last year’s 

proposed rule]. 

E. Alternatives Considered 

1. HH PPS 

For the CY 2023 HH PPS proposed 

rule, we considered alternatives to the 

provisions articulated in section II.B.2. 

of this proposed rule. Specifically, we 

considered other potential 

methodologies to determine the 

difference between assumed versus 

actual behavior change on estimated 

aggregate expenditures in response to 

the comment solicitation in the CY 2022 

HH PPS proposed rule (86 FR 35892). 

However, most of the alternate 

methodologies controlled for certain 

actual behavior changes (for example, 

the reduction in therapy visits) and this 

is not in alignment with what the statute 

requires at section 1895(b)(3)(D)(i) of the 

Act where we must examine actual 

behavior change. Therefore, any method 

that would control for an actual 

behavior change would be counter to 

what is required by law. Additionally, 

we considered alternative approaches to 

the implementation of the permanent 

and temporary behavior assumption 

adjustments. As described in section 

II.B.2. of this rule, to help prevent future 

over or underpayments, we calculated a 

permanent prospective adjustment by 

determining what the 30-day base 

payment amount should have been in 

CYs 2020 and 2021 in order to achieve 

the same estimated aggregate 

expenditures as obtained from the 

simulated 60-day episodes. One 

alternative to the proposed ¥7.69 

percent permanent payment adjustment 

included a phase-in approach, where we 

could reduce the permanent adjustment, 

by spreading out the adjustment over a 

period of a few years. Another 

alternative would be to delay the 

permanent adjustment to a future year. 

However, we believe that a phase-in 

approach or delay for the permanent 

adjustment would not be appropriate, as 

phasing in or delaying the permanent 

adjustment would further impact budget 

neutrality and likely lead to a 

compounding effect creating the need 

for a larger reduction to the payment 

rate in future years. 

Finally, we considered proposing to 

implement the one-time temporary 

adjustment to reconcile retrospective 

overpayments in CYs 2020 and 2021. 

We note that MedPAC’s March 2022 

Report to Congress 78 has found that in 

2020, the aggregate Medicare margin for 

freestanding HHAs was 20.2 percent, a 

nearly 5 percentage point increase from 

the previous year. However, as stated 

previously in this rule, we believe that 

implementing both the permanent and 

temporary adjustments to the CY 2023 

payment rate may adversely affect 

HHAs. Likewise, section 

1895(b)(3)(D)(iii) of the Act gives CMS 

the authority to make any temporary 

adjustment in a time and manner 

appropriate though notice and comment 

rulemaking. Therefore, we believe it is 

best to propose only the implementation 

of the permanent decrease of 7.69 

percent to the CY 2023 base payment 

rate, while soliciting comments on the 

best approach to implement the 

temporary adjustment for overpayments 

to HHAs for CYs 2020 and 2021. 

2. HHQRP 

We did not consider any alternatives 

in this proposed rule. 

3. Expanded HHVBP Model 

We discuss the alternative we 

considered to the proposed change to 

the HHA baseline year for each 

applicable measure in the expanded 

HHVBP Model in section IV.B.2.b. of 

this proposed rule. 

4. Home Infusion Therapy 

We did not consider any alternatives 

in this proposed rule. 

F. Accounting Statements and Tables 

1. HH PPS 

As required by OMB Circular A–4 

(available at https:// 

www.whitehouse.gov/wp-content/

uploads/legacy_drupal_files/omb/ 

circulars/A4/a-4.pdf), in Table F7, we 

have prepared an accounting statement 

showing the classification of the 

transfers and benefits associated with 

the CY 2023 HH PPS provisions of this 

rule. 

2. HHQRP 

As required by OMB Circular A–4 

(available at https:// 

www.whitehouse.gov/sites/ 

whitehouse.gov/files/omb/circulars/A4/ 

a-4.pdf), in Table F8, we have prepared 

an accounting statement showing the 

classification of the expenditures 

associated with this proposed rule as 

they relate to HHAs. Table F8 provides 

our best estimate of the increase in 

burden for OASIS submission. 


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TABLE F7: ACCOUNTING STATEMENT: HH PPS CLASSIFICATION OF 

ESTIMATED TRANSFERS AND BENEFITS, FROM CY 2022 TO 2023 

Catee;ory Transfers 

Annualized Monetized Transfers -$810 million 

From Whom to Whom? Federal Government to HHAs 

TABLE FS: ACCOUNTING STATEMENT: CLASSIFICATION OF ESTIMATED 

COSTS OF OASIS ITEM COLLECTION, FROM CY 2022 TO CY 2023 

Cate or Costs 

Annualized Net Monetary Burden for HHAs' Submission of the OASIS $267,157,680.3 
Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 37681 

79https://www.sba.gov/sites/default/files/2019- 

08/SBA%20Table%20of%20Size%20Standards_

Effective%20Aug%2019%2C%202019_Rev.pdf. 

3. Expanded HHVBP Model 

As required by OMB Circular A–4 

(available at https:// 

www.whitehouse.gov/sites/

whitehouse.gov/files/omb/circulars/A4/ 

a-4.pdf), in Table F9, we have prepared 

an accounting statement Table F9 

provides our best estimate of the 

decrease in Medicare payments under 

the expanded HHVBP Model. 

G. Regulatory Flexibility Act (RFA) 

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. In addition, 

HHAs and home infusion therapy 

suppliers are small entities, as that is 

the term used in the RFA. Individuals 

and States are not included in the 

definition of a small entity. 

The North American Industry 

Classification System (NAICS) was 

adopted in 1997 and is the current 

standard used by the Federal statistical 

agencies related to the U.S. business 

economy. We utilized the NAICS U.S. 

industry title ‘‘Home Health Care 

Services’’ and corresponding NAICS 

code 621610 in determining impacts for 

small entities. The NAICS code 621610 

has a size standard of $16.5 million 79

and approximately 96 percent of HHAs 

and home infusion therapy suppliers are 

considered small entities. Table F10 

shows the number of firms, revenue, 

and estimated impact per home health 

care service category. 

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 

significant economic impact on a 

substantial number of small entities. We 

estimate that the net impact of the 

policies in this rule is approximately 

$810 million in decreased payments to 

HHAs in CY 2023. The $810 million in 

decreased payments is reflected in the 

last column of the first row in Table F5 

as a 4.2 percent decrease in 

expenditures when comparing CY 2023 

payments to estimated CY 2022 

payments. The 4.2 percent decrease is 

mostly driven by the impact of the 

permanent behavior assumption 

adjustment reflected in the third column 

of Table F5. Further detail is presented 

in Table F5, by HHA type and location. 

With regards to options for regulatory 

relief, we note that section 


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TABLE F9: ACCOUNTING STATEMENT: EXPANDED HHVBP MODEL 

CLASSIFICATION OF ESTIMATED TRANSFERS FOR CYs 2023- 2027 

Cate2ory Transfers Discount Rate Period Covered 

Annualized Monetized Transfers -$662.4 Million 7% CYs 2023-2027 

Annualized Monetized Transfers -$669.7 Million 3% CYs 2023-2027 

From Whom to Whom? Federal Government to Hosoitals and SNFs 

TABLE FlO: NUMBER OF FIRMS, REVENUE, AND ESTIMATED IMPACT OF 

HOME HEALTH CARE SERVICES BY NAICS CODE 621610 

Estimated Impact 

NAICS Number Receipts ($1,000) per 

Code NAICS Description Enterprise Size of Firms ($1,000) Enterprise Size 

621610 Home Health Care Services <100 5,861 210,697 $35.95 

621610 Home Health Care Services 100-499 5,687 1,504,668 $264.58 

621610 Home Health Care Services 500-999 3,342 2,430,807 $727.35 

621610 Home Health Care Services 1,000-2,499 4,434 7,040,174 $1,587.77 

621610 Home Health Care Services 2,500-4,999 1,951 6,657,387 $3,412.29 

621610 Home Health Care Services 5,000-7,499 672 3,912,082 $5,821.55 

621610 Home Health Care Services 7,500-9,999 356 2,910,943 $8,176.81 

621610 Home Health Care Services 10,000-14,999 346 3,767,710 $10,889.34 

621610 Home Health Care Services 15,000-19,999 191 2,750,180 $14,398.85 

621610 Home Health Care Services >20,000 961 51,776,636 $53,877.87 

621610 Home Health Care Services Total 23,801 82,961,284 $3,485.62 .. Source: Data obtamed from Umted States Census Bureau table "us_6d1g1tnaics_rcpts1ze_2017" (SOURCE: 2017 County 

Business Patterns and Economic Census) Release Date: 5/28/2021: https:/ /www2.census.gov/programs-surveys/susb/tables/2017 / 

Notes: Estimated impact is calculated as Receipts ($1,000)/Number offimls. 
37682 Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 

1895(b)(3)(D)(i) of the Act requires CMS 

to annually determine the impact of 

differences between the assumed 

behavior changes finalized in the CY 

2019 HH PPS final rule (83 FR 56455) 

and actual behavior changes on 

estimated aggregate expenditures under 

the HH PPS with respect to years 

beginning with 2020 and ending with 

2026. Additionally, section 

1895(b)(3)(D)(ii) and (iii) of the Act 

requires that CMS make permanent and 

temporary adjustments to the payment 

rate to offset for such increases or 

decreases in estimated aggregate 

expenditures through notice and 

comment rulemaking. Since the 

permanent and temporary adjustments 

are mandated by statute, we cannot offer 

HHAs relief from these adjustments. 

While we are not proposing to 

implement the temporary payment 

adjustments in CY 2023, we believe that 

the ¥7.69 percent permanent payment 

adjustment, described in section II.B.2.c. 

of this proposed rule, is necessary to 

offset the increase in estimated 

aggregate expenditures for CYs 2020 and 

2021 based on the impact of the 

differences between assumed behavior 

changes and actual behavior changes. In 

the alternatives considered previously, 

we noted that we considered a phase-in 

approach to the permanent adjustment. 

However, we believe that a phase-in of 

the permanent adjustment is not 

appropriate for CY 2023 because it 

would further impact budget neutrality 

and likely lead to a compounding effect 

creating the need for a larger reduction 

to the payment rate in future years. As 

mentioned previously, we recognize 

that implementing both the permanent 

and temporary adjustments to the CY 

2023 payment rate may adversely affect 

HHAs, including small entities. 

Therefore, we are soliciting comments 

on the best approach to collect the 

temporary payment adjustment of $2.0 

billion for CYs 2020 and 2021. We 

solicit comments on the overall HH PPS 

RFA analysis. 

Guidance issued by HHS interpreting 

the Regulatory Flexibility Act considers 

the 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. Among the over 7,500 HHAs that 

are estimated to qualify to compete in 

the expanded HHVBP Model, we 

estimate that the percent payment 

adjustment resulting from this rule 

would be larger than 3 percent, in 

magnitude, for about 28 percent of 

competing HHAs (estimated by applying 

the proposed 5-percent maximum 

payment adjustment under the 

expanded Model to CY 2019 data). As 

a result, more than the RFA threshold of 

5-percent of HHA providers nationally 

would be significantly impacted. We 

refer readers to Tables 43 and 44 in the 

CY 2022 HH PPS final rule (86 FR 62407 

through 62410) for our analysis of 

payment adjustment distributions by 

State, HHA characteristics, HHA size 

and percentiles. 

Thus, the Secretary has certified that 

this proposed rule would have a 

significant economic impact on a 

substantial number of small entities. 

Though the RFA requires consideration 

of alternatives to avoid economic 

impacts on small entities, the intent of 

the rule, itself, is to encourage quality 

improvement by HHAs through the use 

of economic incentives. As a result, 

alternatives to mitigate the payment 

reductions would be contrary to the 

intent of the rule, which is to test the 

effect on quality and costs of care of 

applying payment adjustments based on 

HHAs’ performance on quality 

measures. 

In addition, section 1102(b) of the Act 

requires us to prepare a Regulatory 

Impact Analysis (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 certified that this 

proposed rule would not have a 

significant economic impact on the 

operations of small rural hospitals. 

I. Unfunded Mandates Reform Act 

(UMRA) 

Section 202 of UMRA 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 2022, that 

threshold is approximately $165 

million. This proposed rule would not 

impose a mandate that will result in the 

expenditure by State, local, and Tribal 

Governments, in the aggregate, or by the 

private sector, of more than $165 

million in any one year. 

J. Federalism 

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 

would not impose substantial direct 

costs on State or local governments. 

Chiquita Brooks-LaSure, 

Administrator of the Centers for 

Medicare & Medicaid Services, 

approved this document on June 10, 

2022. 

List of Subjects in 42 CFR Part 484 

Health facilities, Health professions, 

Medicare, and 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 follows: 

PART 484—HOME HEALTH SERVICES 

■ 1. The authority citation for part 484 

continues to read as follows: 

Authority: 42 U.S.C. 1302 and 1395hh. 

■ 2. Section 484.220 is amended by 

adding paragraph (c) to read as follows: 

§ 484.220 Calculation of the case-mix and 

wage area adjusted prospective payment 

rates. 

* * * * * 

(c) Beginning on January 1, 2023, 

CMS applies a cap on decreases to the 

home health wage index such that the 

wage index applied to a geographic area 

is not less than 95 percent of the wage 

index applied to that geographic area in 

the prior calendar year. The 5-percent 

cap on negative wage index changes is 

implemented in a budget neutral 

manner through the use of wage index 

budget neutrality factors. 

■ 3. Section 484.245 is amended— 

■ a. In paragraph (b)(1)(i) by removing 

the reference ‘‘sections 1899B(c)(1) and 

1899B(d)(1) of the Act’’ and adding in 

its place the reference ‘‘sections 

1895(b)(3)(B)(v)(II), 1899B(c)(1), and 

1899B(d)(1) of the Act’’; 

■ b. In paragraph (b)(1)(iii) by removing 

the first sentence; and 

■ c. By adding paragraph (b)(3). 

The addition reads as follows: 

§ 484.245 Requirements under the Home 

Health Quality Reporting Program (HH 

QRP). 

* * * * * 

(b) * * * 

(3) CMS may remove a quality 

measure from the HH QRP based on one 

or more of the following factors: 

(i) Measure performance among HHAs 

is so high and unvarying that 

meaningful distinctions in 

improvements in performance can no 

longer be made. 


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Federal Register / Vol. 87, No. 120 / Thursday, June 23, 2022 / Proposed Rules 37683 

(ii) Performance or improvement on a 

measure does not result in better patient 

outcomes. 

(iii) A measure does not align with 

current clinical guidelines or practice. 

(iv) The availability of a more broadly 

applicable (across settings, populations, 

or conditions) measure for the particular 

topic. 

(v) The availability of a measure that 

is more proximal in time to desired 

patient outcomes for the particular 

topic. 

(vi) The availability of a measure that 

is more strongly associated with desired 

patient outcomes for the particular 

topic. 

(vii) Collection or public reporting of 

a measure leads to negative unintended 

consequences other than patient harm. 

(viii) The costs associated with a 

measure outweigh the benefit of its 

continued use in the program. 

* * * * * 

■ 4. Section 484.345 is amended— 

■ a. In the definition of ‘‘Achievement 

threshold’’ by removing the phrase 

‘‘during a baseline year’’ and adding in 

its place the phrase ‘‘during a Model 

baseline year’’; 

■ b. By removing the definition of 

‘‘Baseline year’’; 

■ c. In the definition of ‘‘Benchmark’’ by 

removing the phrase ‘‘during the 

baseline year’’ and adding in its place 

the phrase ‘‘during the Model baseline 

year’’; 

■ d. By adding the definition of ‘‘HHA 

baseline year’’ in alphabetical order; 

■ e. In the definition of ‘‘Improvement 

threshold’’ by removing the phrase 

‘‘during the baseline year’’ and adding 

in its place the phrase ‘‘during the HHA 

baseline year’’; and 

■ f. By adding the definition of ‘‘Model 

baseline year’’ in alphabetical order. 

The additions read as follows: 

§ 484.345 Definitions. 

* * * * * 

HHA baseline year means the 

calendar year used to determine the 

improvement threshold for each 

measure for each individual competing 

HHA. 

* * * * * 

Model baseline year means the 

calendar year used to determine the 

benchmark and achievement threshold 

for each measure for all competing 

HHAs. 

* * * * * 

■ 5. Section 484.350 is amended by 

revising paragraph (b) and adding 

paragraph (c) to read as follows: 

* * * * * 

(b) New HHAs. A new HHA is 

certified by Medicare on or after January 

1, 2022. For new HHAs, the following 

apply: 

(1) The HHA baseline year is the first 

full calendar year of services beginning 

after the date of Medicare certification. 

(2) The first performance year is the 

first full calendar year following the 

HHA baseline year. 

(c) Existing HHAs. An existing HHA 

is certified by Medicare before January 

1, 2022 and the HHA baseline year is 

calendar year (CY) 2022. 

§ 484.370 [Amended] 

■ 6. Section 484.370 is amended in 

paragraph (a) by removing the phrase 

‘‘Model for the baseline year, and CMS’’ 

and adding in its place the phrase 

‘‘Model, and CMS’’. 

Dated: June 16, 2022. 

Xavier Becerra, 

Secretary, Department of Health and Human 

Services. 

[FR Doc. 2022–13376 Filed 6–17–22; 4:15 pm] 

BILLING CODE 4120–01–P 


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