Home Health Value-Based Purchasing

Home Health Value-Based Purchasing

The words “Value-Based Purchasing” have been circulating in healthcare regulatory circles over the past few years. Anyone familiar with hospital regulations and payment models knows that the Hospital Value-Based Purchasing model was initiated in 2012. This system shifted the focus of payment from quantity of care furnished to acute patients in the hospital setting to quality of care, penalizing hospitals that perform under the 50’th percentile of designated quality indicators, and incentivizing those that are above the 95’th percentile. On January 1, 2016 all Medicare-certified home health agencies across nine states began competing in the Home Health Value-Based Purchasing (HHVBP) Model with the goals of higher quality, more efficient care. The nine states, Massachusetts, Maryland, North Carolina, Florida, Washington, Arizona, Iowa, Nebraska and Tennessee combine to produce a comprehensive sample for the evaluation of the HHVBP model based on common home health agency characteristics such as patient demographics, case mix, utilization rates and agency size. Home health care agencies in these states, referred to as "Competing Home Health Agencies" will compete against each other for payment incentives (or reductions) based on quality indicators. The HHVBP model will be implemented nation-wide between January 1, 2016 and December 31, 2022.

Maximum Percentage of Payment Adjustment

The maximum amount payment can be reduced or increased per year

The first 9 states selected to participate in the HHVBP model will be monitored for a period of 5 years, starting January 1, 2016. According to the Final Rule published on November 5, 2015, quality improvements or declines in 2016 will be measured off of data collected in the 2015 calendar year. The model will have an implementation cycle of 5 years, in which a home health agency will see a potential increase or decrease of payments made for services provided to Medicare beneficiaries of 3% the first year and up to 8% by the fifth year. 

HHVBP Time Frames and Process

Competing HHA's will be measured against other competing agencies within their state and against their own performance from their baseline year. For agencies that are not located in one of the nine selected states to start this January 1, the first year where performance will be measured is this year, 2016, with the first payment adjustments commencing January 1, 2018. The baseline year for brand new home health agencies just receiving their provider number will be their first calendar year in operations. Agencies will be able to keep track of their scores through a dedicated portal and will be notified of their final scores and payment modifications for the following year on August 1 of the previous year. For example, home health care agencies that have their first payment modification effective January 1, 2018 will be notified on August 1, 2017. There will be a 30 day review window which will allow HHA's to review the collected data and, if they disagree with the results, request a recalculation. Final scores/payment modifications will be given by November 1 2017. The following year, and each year thereafter will follow the same formula:

Year 1

  • January 1 through December 31 - Data Collection Period

Year 2

  • August 1 - Release of Payment Adjustment based on Performance Levels

  • August 31 - End of Preview Period

  • November 1 - Release of Final/Reconciled Payment Adjustments

Year 3

  • January 1 - Payment Adjustment Based on Year 1 Data Begins

As shown above, the current schedule calls for annual payment adjustment however legislators understand that basing payment rates on data collected 2 years prior will leave many agencies feeling helpless or unmotivated in making the proper investments to improve their scores. Other data collection and payment rate adjustment cycles are being considered to ensure agencies see a closer cause-effect in performance improvement efforts.

Quality Measures

Home health industry quality indicators have been selected to measure the level of care provided by each home health agency to Medicare beneficiaries from the following 4 sources:

  1. Data collected from OASIS submissions;

  2. Claim-related data;

  3. Patient-reported data from HHCAHPS activities;

  4. Data home health cares report directly to CMS.

The data collected will consist of process, outcome and consumer measures, as well as 3 new measures which will require direct submission to CMS via the HHVBP website.

Process Measures

Process measures refers to the information collected on how a home health agency conducts important, high risk processes. For example, how long it takes an agency from referral to Start of Care, or how often the HHA provides immunizations. Process measures are collected from the OASIS and are measured by comparing data from the Start of Care OASIS all the way through to the Discharge OASIS. The following 6 OASIS questions are used in the first data set for Home Health Value-Based Purchasing:

  1. M1041: Influenza Vaccine Data Collection Period: Does this episode of care include any dates on or between October 1 and March 31?

  2. M1046: Influenza Immunization Received for Current Flu Season

  3. M1051: Pneumococcal Polysaccharide Vaccine Ever Received

  4. M1056: Reason Pneumococcal vaccine not received

  5. M2015: Drug Education on All Medications Provided to Patient/Caregiver during all Episodes of Care

  6. M2102: Care Management: Types and Sources of Assistance

Outcome Measures

Outcome measures refers to the information collected on the results patients experience from the home health agency's care. For example, how many patients were re-hospitalized within 30 days after starting the home health episode or how many patients developed a UTI. Outcome measures are collected from both OASIS and claims data. The following 10 outcome measures are used in the first data set for Home Health Value-Based Purchasing:

  1. OASIS M1242: Improvement in Pain Interfering with Activity

  2. OASIS M1400: Improvement in Dyspnea

  3. OASIS M1830: Improvement in Bathing

  4. OASIS M1850: Improvement in Bed Transferring

  5. OASIS M1860: Improvement in Ambulation-Locomotion

  6. OASIS M1900: Prior Functioning ADL/IADL

  7. OASIS M2020: Improvement in Management of Oral Medications

  8. OASIS M2420: Discharged to Community

  9. Claims: Acute Care Hospitalization: Unplanned Hospitalization during first 60 days of Home Health

  10. Claims: Emergency Department Use without Hospitalization


HHCAHPS (Home Health Consumer Assessment of Healthcare Providers and Systems) refers to a survey conducted on a monthly basis where patients answer questions about the scope and perceived quality of care they are or have received by a home health agency. The following 5 HH CAHPS items are used in the first data set for Home Health Value-Based Purchasing:

  1. HH CAHPS: Care of Patients

  2. HH CAHPS: Communications between Providers and Patients

  3. HH CAHPS: Specific Care Issues

  4. HH CAHPS: Overall rating of home health care 

  5. HH CAHPS: Willingness to recommend the agency