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  1. Proposed CMS Payment Rules Will Worsen the Home Care Crisis
  2. CMS Clarifies 3-Hour “Rule” Should Not Preclude Medicare-Covered Inpatient Rehabilitation Hospital Care
  3. Register Now – One Week Left Until the National Voices of Medicare Summit & Sen. Jay Rockefeller Lecture in Washington, DC

Proposed CMS Payment Rules Will Worsen the Home Care Crisis

This is the eighth of a ten-part CMA Issue Brief Series examining the growing crisis in access to Medicare home health coverage and necessary care – and outlining the Center for Medicare Advocacy’s work to address these issues. We invite you to follow this Issue Brief Series and submit Medicare home health stories to the Center at

CMA Issue Brief Series: Medicare Home Health Care Crisis

  1. Overview – The Crisis in Medicare Home Health Coverage and Access to Care
  2. Medicare Home Health Coverage, Legally Defined
  3. Medicare Coverage for Home Care Is Based On a Need For Skilled Care – Improvement Is Not Required
  4. Misleading and Inaccurate CMS Medicare Home Health Publications
  5. The Home Care Crisis: An Elder Justice Issue
  6. Beneficiary Protections Expanded in Revised Home Health Conditions of Participation
  7. Barriers to Home Care Created by CMS Payment, Quality Measurement, and Fraud Investigation Systems
  8. Proposed CMS Payment Rules Will Worsen the Home Care Crisis
  9. A Further Examination of the Home Care Crisis: Published Articles and Statistical Trends
  10. Strategic Plans to Address and Resolve the Medicare Home Care Crisis

Proposed CMS Payment Rules Will Worsen the Home Care Crisis

If proposed new payment rules are adopted by the Centers for Medicare and Medicaid Services (CMS), beneficiaries with longer term and chronic care needs will face greater access barriers to Medicare home care benefits. In a proposed 2018 rule, CMS introduced the Home Health Groupings Model (HHGM) as a model for future home health payment reform.[1] Public response to the proposed HHGM, by beneficiary advocates and home health agencies alike, raised significant concerns about the potential devastating impacts of the HHGM on access to care.

In the 2018 final rule, CMS reported that the agency was not finalizing implementation of the HHGM.[2] Despite this CMS decision, that recognized significant beneficiary and provider concerns, some provisions of the HHGM were recently passed into law by Congress. [3] Most notably, under the law Medicare home health episodes of care were reduced from a 60-day period to a 30-day period, effective January 1, 2020.

What is HHGM?

  1. Introduction

The HHGM, as proposed by CMS, encourages home health agencies, through weighted payment incentives, to provide brief periods of home care services to people who return to their homes following a hospitalization or nursing home stay. The HHGM would pay a home health agency at a significant premium for home care provided within the first 30 days (as much as 40% more than the HHGM would pay an agency to provide care to a person who does not have hospitalization or nursing home stay before starting home care services, and if he or she needs services beyond 30 days). The totality of the HHGM provisions (episode timing, admission source, clinical groupings, functional levels, and comorbidity adjustment) create the payment weights that determine reimbursement to providers.

  1. Episode Timing

In addition to reducing a home health episode from 60 to 30 days, the first 30-day episode in the HHGM would be considered an “early” episode while subsequent episodes would be “late”. Under the existing prospective payment system (PPS), the first two 60-day episodes (120 days) are considered “early.”   Agencies are paid more for “early” episodes than they are for “late” episodes. Thus, in the HHGM, agencies would be paid more for the first 30 days while currently they are paid more for the first 120 days.

  1. Admission Source

The greatest discriminator of all the HHGM payment criteria is admission source. Whether the episode timing is “early” or “late,”  admissions to home care from an institution (such as a hospital or nursing home) would be most highly compensated under the HHGM, even considering adjustments for clinical grouping, functional impairments, and comorbidity. Community admissions (beginning care for individuals who are at home), would be significantly devalued, further jeopardizing access to care for people with chronic conditions and others who, fortunately, avoid hospital and skilled nursing facility stays.

  1. Clinical Groupings

The HHGM would narrow clinical groupings to six (musculoskeletal rehabilitation, neuro/stroke rehabilitation, wounds – wound aftercare and skin/non-surgical wound care, behavioral health care, complex nursing interventions, and medication management – teaching – assessment). All other diagnosis codes would be distributed within these six categories for payment weighting.

  1. Functional Levels

The HHGM would score a person’s functional needs as simply low, medium or high. There would be small payment weight differences relative to the significant cost for someone who requires considerable assistance with functioning.

  1. Comorbidity Adjustment

The comorbidity adjustment in the HHGM is “yes or no.”  There would be no distinction in payment, weighting whether the person has one or multiple comorbidities.

Impact of the HHGM on Medicare Beneficiaries 

The HHGM would significantly diminish access to Medicare-covered home care for people who are clinically complex and have chronic illnesses and impairments. People who qualify for (and need) coverage and care for longer than 30 days but have not been admitted to home health care from a prior institutional stay will find it even harder to obtain, and retain, home care.

Implementing Medicare coverage laws should be the goal of all payment and quality measures, particularly those enacted into law. If adopted in their present form, however, HHGM payment provisions will conflict with Medicare coverage criteria and will determine who will have access to care, and who will be denied care – even among those who qualify under the law.

Every home health care case should be individually assessed to determine appropriate Medicare coverage. As CMS and the courts have agreed, there should be no “rules of thumb” in Medicare. CMS states that “[e]pisodes have more visits, on average, during the first 30 days compared to the last 30 days. Costs are much higher earlier in the episode and lesser later on.”[4] (FR 35294) Again, while this is true for some people, it is not true for those who live day-in and day-out for months and, often, years with chronically complex conditions. The “average visits” analysis of CMS is not only an inaccurate approach, because it considers all patients to be the same, it is painfully insulting to people who cannot “improve” back to functioning within a 30 day episode of care – people who equally qualify under the law for home care coverage.

Relatively small payment weight consideration is provided under the HHGM for care to individuals with comorbidities or functional impairments. Payments may be based on the needs of some patients – those who do not need care for very long and who had an institutional stay within 14 days of needing home care are projected to need the highest payment. But, care needs are not defined by the point of entry into care (institution or community). Nor are they defined by the length of time to achieve “lesser” care needs (30 days). The HHGM discriminates against people with chronic conditions, the very people CMS purports it seeks to protect.

The following is an example of how the HHGM would provide payment incentives for HHAs to only serve people with short-term, post-institutional/acute care home care needs[5]:

Complex nursing interventions (clinical group), Low (functional level), with a Comorbidity Adjustment, Timing (early or late)(“early” is first 30 days of care) and Admission Source (community or institution) = Payment weight

Early, Institutional =   1.3549 (payment weight)
Late, Institutional =    1.2367
Early, Community =   1.1840
Late, Community =    0.7937

A “late, community” beneficiary (with a payment weight of .7937), who may have greater care needs than a “early, institutional” beneficiary (with a payment weight of 1.3549) would have significant difficulty accessing care, based on lower reimbursement to home care agencies for significant care needs, even though the beneficiary qualifies for home care under Medicare law.

Finally, an overarching concern about the development of the HHGM is how payment models based on “average” needs create arbitrary rules of thumb that in turn eliminate access to care. With the assistance of technology, coverage and payment determinations based on individualized assessments should be more readily available than ever, and are required.


While Congress has enacted 30-day Medicare home health episodes effective January 1, 2020, CMS should revisit the impact remaining provisions of the HHGM will have on beneficiaries and their access to care. A home health payment system that employs accurate payment algorithms may be efficient, given the millions of beneficiaries who seek access to home health, however, a one-size-fits-all approach process creates rules of thumb that significantly and illegally limit access to care. The existing payment system, PPS, created winners and losers among Medicare beneficiaries – some people have access to care, others do not. CMS should not allow the HHGM to create a new set of winners and losers. Instead, CMS should develop margin neutral payment programs that allow equal incentives to provide Medicare-covered home health care to all who qualify under the law. The HHGM model, or any payment program, must be carefully developed in order to ensure equal access to care.


CMS Clarifies 3-Hour “Rule” Should Not Preclude Medicare-Covered Inpatient Rehabilitation Hospital Care

Inpatient rehabilitation hospitals (IRHs, also known as Inpatient Rehab Facilities/IRFs) provide intensive rehabilitation services to patients on an inpatient basis.[1]  Over time, a myth developed – based on a discredited CMS Policy – that patients are appropriate for Medicare-covered IRH care only if they can participate in at least three hours a day of rehabilitative services.  The Centers for Medicare & Medicaid Services (CMS) has clarified, once again, that this is not true.

On February 23, 2018, CMS issued a technical direction to Medicare contractors clarifying that reviewers “shall not make absolute claim denials based solely on a threshold of therapy time not being met.”[2]  The Transmittal requires that if a patient does not receive three hours of therapy a day (or at least 15 hours of therapy within a 7 consecutive day period), the reviewer,

“shall use clinical review judgment to determine medical necessity of the intensive rehabilitation therapy program based on the individual acts and circumstances of the case, and not on the basis of any threshold of therapy time.” (Emphasis Added.)

The general standard of care in IRHs is individualized (one-on-one) therapy, although some use of group or concurrent therapy is permissible on “a limited basis.”

While this Transmittal is welcome, especially in light of denials of IRH coverage when a patient just misses minutes of therapy in a 7-day period, it is not new information.  In 1989, a federal district court in Connecticut issued an Order in Hooper v. Sullivan recognizing the principle that,

“denials of admissions, services, and/or Medicare coverage based upon numerical utilization screens, diagnostic screens, diagnosis, specific treatment norms, the ‘three hour rule,’ or other ‘rules of thumb’ are not appropriate.”[3] 

The Hooper Order required the Health Care Financing Administration (now CMS) to revise language in its Medicare Intermediary Manual and Medicare Hospital Manual correcting the misconception about the three-hour criterion and recognizing, instead, that care in an IRH “will be considered medically necessary if the patient requires and receives ‘a more coordinated, intensive program of multiple services than is generally found out of a hospital.’” This is the law.

[1] the Center for Medicare Advocacy’s materials on inpatient rehabilitation hospitals at
[2] CMS, “Clarification of Instructions Regarding the Intensive Level of Rehabilitation Therapy services Requirements,” Transmittal 771, Pub 100-08, Medicare Program Integrity Manual (Feb. 23, 2018),
[3] Hooper v. Sullivan, No. H-80-99(PCD) (D. Conn, Jul. 20, 1989), 1989 West Law 107497, Medicare & Medicaid Guide (CCH) ¶37,985.


One Week Left Until the National Voices of Medicare Summit & Sen. Jay Rockefeller Lecture in Washington, DC

The Center for Medicare Advocacy's 5th annual National Voices of Medicare Summit & Senator Jay Rockefeller Lecture will connect leading experts and advocates to discuss best practices, challenges and successes in efforts to improve access to quality health coverage and care. This year's Summit will focus on health care activism and efforts to preserve (and enhance) the Affordable Care Act, Medicare, and Medicaid.  Senators Chris Murphy and Jay Rockefeller will be present to help participants think about building a healthy future for all Americans.

Our incredible guests also include Rep. Debbie Dingell speaking about the need for audiology coverage in Medicare; Tricia Neuman (VP, Kaiser Family Foundation)Sean Cavanaugh (Former CMS Medicare Director); Nancy-Ann Deparle (Former CMS Administrator, Clinton Administration and lead Affordable Care architect, Obama Administration); Chris Jennings (Health policy expert and health policy leader, Clinton and Obama Administrations); Kate McEvoy (VP, Board – National Association of Medicaid Directors)Max Richtman (National Committee to Preserve Social Security & Medicare); Ben Wikler (MoveOn); Khelan Bhatia (AARP); Ilene Stein (Assistant Legislative Director, SEIU); Topher Spiro (Center for American Progress) and Judy Feder (Georgetown University/Urban Institute).


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