Ch. 3: Medicare Payments: Home Health Agencies (p. 58)

Question 1

How are home health agencies paid?

Answer 1

Since 2020:
Patient-Driven Groupings Model.

1. 30-day episodes of care. Paid a national standard rate and adjusted for case-mix and geographic differences in wages.
2. Case-mix adjustment. 432 possible groups with five criteria: admission source, timing, clinical grouping, functional impairment level, and comorbidity adjustment. Outcome and Assessment Information Set (OASIS) is used to assess patient’s condition and determine functional impairment level.
3. Outlier payments. Additional payments for episodes exceeding cost threshold by case-mix group.
4. Adjustments for beneficiaries who require only a few visits during the 30-day-episode. If episodes consist of four or fewer visits, then episodes are paid service-specific rate per visit.
5. Adjustments for beneficiaries who change HHAs.

Sample calculation:

$1,753.68 National standardized 30 day payment rate x 1.5255 case weight = $2,675.24 for the 30 day payment (case-mix adjusted).

Then adjust for actual wage index of provider:

($2,675.24 x 76.1% labor x 1.2263 wage index)
+ ($2,675.24 x 23.9% nonlabor)
= $3,135.02