Introduction

Home Health Agencies (HHAs) are undergoing a regulatory-driven reimbursement transformation with The Center for Medicare and Medicaid Services (CMS) 2024 Final Rule that requires the expansion of value-based payment (VBP) and risk adjustment principles to the traditional fee-for-service based Prospective Payment System. A significant change in 2024 is the recalibration of the Patient-Driven Groupings Model (PDGM) used to adjust case-mix. New cost, utilization, and quality measure changes will be introduced in 2025, including the requirement HHAs report their management of hospital discharges to the community and potentially preventable re-admissions. HHAs have unique capabilities and insights to share with health plans, hospitals, and providers for more collective success in value-based performance metrics and a more cohesive approach to whole-person, home centered care.

Impact to Health Plans

CMS has designed HHA’s transition to VBP at a reasonable pace with requirements that set these providers up for long-term success. The model currently applies value-based principles such as performance measurement and risk-adjustment principles to the existing fee-for-service model. CMS’s plan to transition to a more value-based approach for HHAs is of considerable importance to payers offering Medicare Advantage plans because broader clinical and claims data will be available for performance reporting from CYs 2024 and 2025. Plans can use this data to better assess the uniqueness of the populations they serve. They can also use HHAs for a more timely and personalized approach for in-home medical, social, and behavioral health services. Greater data sharing, tailored analytics, and timely access to care will also allow health plans to assess HHAs’ risk readiness and value-based performance for future contracting.

Impact to Hospitals

Upon hospital admission, care coordinators begin assessing patients’ needs to ensure they are clinically stable and ready for discharge. Hospitals rely heavily on HHAs to ensure successful transitions. Avoidance of readmissions and patient visits to the emergency room are key performance metrics across hospital-based quality performance programs. The expansion of similar measures in the home care setting creates greater alignment between hospitals and HHAs. This alignment can lead to a variety of benefits beyond readmissions and unnecessary utilization such as higher quality and greater patient satisfaction for patients, plans, and providers participating in VBP programs.

Impact to Providers

From large multi-specialty practices to small primary care practices, providing care to patients with reimbursement tied to VBP may represent a financial challenge, whether an accountable care organization has been formed or not. Access to robust data from a longitudinal patient record is important to accurately manage care and ensure it is provided in the most cost-effective, timely, and applicable setting. To accomplish these objectives, provider groups are encouraged to create strong relationships with their HHA providers that understand VBP principles and practices, operations, analytics, and reporting. Care connection and coordination between provider groups and HHAs will have a significant influence on both entities’ ability to meet VBP performance standards and excel at patient expectations.

Impact to Patients

Performance and reporting requirements, along with regulatory compliance, centers   patients at the core of VBP models. Care delivery has evolved to align with pay-for-value initiatives so that patients often have greater interaction with their primary care physician.  Wellness visits, care coordination with specialists, preventive healthcare, and chronic care management are often benefits seen by patients. Clinical outcomes and less out-of-pocket costs for patients improve as their health plans, hospitals, and providers increase communication through the right accurate and timely data exchange.  

Conclusion

The evolution and expansion of VBP to the home health setting is part of the CMS’s Strategic Direction, which set a goal that 100% of Traditional Medicare beneficiaries will be in value-based care relationships with healthcare providers who are accountable for quality and total cost of care by 2030. For health plans and providers upstream from the home healthcare setting, the benefits of enhanced care connection and coordination with HHAs includes greater access to unique data and collaboration opportunities with a timelier approach - thus significantly reducing costs and driving greater performance. CMS is paying close attention to regulatory compliance as demonstrated by increasing activity by the Office of the Inspector General (OIG) and Department of Justice (DOJ) in government pay-for-value programs. Health plans, hospitals, and providers already operating in a pay-for-value environment will benefit significantly from new or optimized engagement with HHA providers that create joint solutions and personalized relationships to influence cost and drive more strategic quality outcomes.  

VBP Expansion: Assess Readiness to Optimize Results

Engage CareOne Consulting experts for a VBP readiness assessment to optimize performance as these principles and regulatory requirements expand across the healthcare industry. We work with entities already engaged in alternative payment models or are preparing for success with the transformative nature of VBP or are ensuring program accuracy and compliancy. CareOne Consultants provide proven and informed industry expertise to help you streamline and effectively execute on your financial, analytical, and operational challenges within and across health plans and healthcare organizations. 

Be prepared, remain compliant, exceed expectations, and drive performance in VBP with CareOne Consulting.  Take action now at http://www.careoneconsulting.com or email info@careoneconsulting.com for a ONE on ONE personalized and tailored solution.

This content was produced by CareOne Consultant Jennifer Ach, PT, MHA. Jennifer gained experience in clinical practice at Brigham and Women’s Hospital, transitioning to leadership roles in healthcare technology, data analytics, and regulatory affairs at companies such as athenahealth and Cotiviti. She offers unique perspectives on the regulatory environment for compliance with payment innovations driven by cost, quality, and patient-centered outcomes.