National Expansion of Home Health Value-Based Purchasing Model Estimated to Create $6.3B in Savings

In somewhat of a surprise move, U.S. health care policymakers unveiled plans last week to expand the Home Health Value-Based Purchasing (HHVBP) Model, a nine-state Medicare demonstration designed to better align reimbursement to quality of care.

Despite backing from most of the home health industry, the HHVBP Model — first implemented in 2016 — had seemingly hit a speedbump in recent years. Apart from a handful of minor modifications, the model only remained active in Massachusetts, Maryland, North Carolina, Florida, Washington, Arizona, Iowa, Nebraska and Tennessee.

With more than one-quarter of its home health agencies currently located in HHVBP states, the Baton Rouge, Louisiana-based Amedisys Inc. (Nasdaq: AMED) has been among the biggest supporters of value-based purchasing. The company has persistently urged the Center for Medicare & Medicaid Innovation (CMMI) to expand the model for over a year.

“There’s still a perception out there that there is a high level of fraud in home health care — and that’s simply not true,” Amedisys CEO and President Paul Kusserow told Home Health Care News. “I think having to prove ourselves on the quality front and being willing to take risk on quality is absolutely the right thing for us.”

So far, even just the limited HHVBP Model has been able to achieve overwhelmingly positive results.

Since implemented, the model has contributed to a 4.6% improvement in home health agencies’ quality scores, in addition to average annual Medicare savings of $141 million, federal statistics show. On top of those points, agencies in HHVBP states have been able to significantly lower the costly utilization of hospitals and skilled nursing facilities (SNF).

“This has been extremely good,” Kusserow said.

As part of its push for an expanded HHVBP Model, Amedisys brought in Washington, D.C.-based research and consulting firm The Moran Company. The home health giant asked Moran to dig deeper into past results and explore what a nationwide rollout would eventually look like.

After cranking the numbers, the research firm estimated that a 50-state HHVBP Model would result in about $6.3 billion in savings over a 10-year period, using Congressional Budget Office (CBO) scoring methodology.

“We engaged in a very long dialogue [with CMMI] and exchanged a lot of data to push this forward,” Kusserow added.

Inside the advocacy process

Besides the whopping $6.3 billion in savings, Moran also determined that a nationwide rollout of the Home Health Value-Based Purchasing Model would lead to better post-acute care outcomes for Medicare beneficiaries and more ways for the U.S. Centers for Medicare & Medicaid Services (CMS) to identify high- and low-quality providers.

In many ways, the advocacy efforts around HHVBP were so effective because they were driven by “the power of a good idea,” according to David Kemmerly, the chief legal and government affairs officer at Amedisys. Instead of having to artfully persuade CMS and CMMI to expand the model, his team’s job was more about giving policymakers the objective information they otherwise lacked.

“They have to go make their case with the actuaries before they can expand something,” Kemmerly told HHCN. “So we helped arm CMS with the data and information they needed.”

It took more than facts and figures, however.

To help advance HHVBP, Kusserow communicated regularly with CMMI Director Brad Smith, the former CEO of home-based palliative care provider Aspire Health who joined the CMS Innovation Center in early 2020. Kusserow and Smith had already “known each other a long time,” thanks to their shared experiences in Nashville, Tennessee, and standing as Rhodes scholars.

“When [Smith] went to Washington, he called me up and said, ‘What should I be thinking about?’” Kusserow said. “Obviously, he was asking a lot of people that. I said, ‘I really think there’s something to value-based purchasing in home health. I’d really like you to look at it.’”

At first, CMMI decision-makers were concerned about home health provider buy-in.

While Amedisys and others sought to advance HHVBP, others were slightly skeptical, especially early on. More than a few home health operators believed HHVBP was just another piece of government regulation, with others too preoccupied with the Patient-Driven Groupings Model (PDGM) to worry about alternative payment mechanisms.

On its end, Amedisys worked hard to boost the industry’s understanding and acceptance of HHVBP, Kemmerly said.

“There’s a bit of politics involved,” he noted. “[Smith] asked us early on, ‘Where is the industry on this? And can you bring the industry to the table?’”

Unanswered questions

CMMI and CMS are committed to expanding the Home Health Value-Based Purchasing Model, but there are plenty of questions left to answer and improvements that can be made.

On a basic level, it’s still unclear whether policymakers will try to expand HHVBP through a standalone proposal or through the annual rulemaking cycle. Additionally, it’s not yet known whether that future expansion will be national or more incremental, possibly adding another dozen or so states to the current nine-state mix.

Scott Levy, the senior vice president of government affairs at Amedisys, was in the trenches for most of Amedisys’ advocacy battle on HHVBP. In all likelihood, CMS will pursue a 50-state expansion and implementation through the annual rulemaking cycle, Levy speculated.

“I’m just merely reading between the lines, but our discussions [with CMS] and our data presented to them was all based on the idea of a nationwide expansion,” he told HHCN.

Along with answers to those questions, Amedisys is also pushing for improvements to the HHVBP Model itself.

In 2020, home health providers were exposed to 6% upside and downside risk, depending on their quality performance. That figure increases to 7% and 8% in 2021 and 2022, respectively.

But it’s almost impossible to come close to that full upside or downside as the model is currently structured.

“The upside has been good for us. It’s generally quite positive,” Kusserow said. “But we feel the curve is too clustered toward the center. It is very hard to get the full rewards or to get the full penalties.”

In 2018, the payment adjustment in HHVBP ranged from a 1.5% penalty for providers in the lowest-10th percentile to a 1.5% bonus for providers in the highest-10th percentile, according to an investment note from Bank of America. CMS previously stated that the average adjustment was a 0.85% bump in 2018.

“Companies out there with good technology, good tracking systems, good checklists, good verification processes and very good clinical operations are the ones that are going to continue to do well and thrive under this, for sure,” Kusserow said.

A possible complication to HHVBP expansion plans could have been the transition to a new Biden administration, which is guaranteed to bring changes to CMMI, CMS and throughout the U.S. Department of Health and Human Services (HHS).

Yet the team at Amedisys doesn’t see that as an issue, considering the model’s origins.

“[HHVBP] was actually rolled out by the Obama administration,” Levy said. “It was proposed during the fall of 2015 for a January 2016 implementation.”

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CMS Announces New Direct-Contracting Model to Promote ‘Easier Access to Home Care’

In April 2019, federal health care officials unveiled a new direct-contracting payment model to accelerate the shift toward value-based care for U.S. primary care providers.

The goal of that model — which has 51 entities already signed up — was to bring a private-sector approach to risk-sharing arrangements in traditional Medicare.

The U.S. Centers for Medicare & Medicaid Services (CMS) — along with the Center for Medicare & Medicaid Innovation (CMMI) — is now adding to its direct-contracting portfolio while also shining a light on home care.

CMS announced on Thursday that it’s launching the “Geographic Direct-Contracting Model,” another new, voluntary direct-contracting pathway designed to pay health care providers for the quality of their care and ability to cut costs.

The launch shouldn’t come as a surprise to those who have been listening to CMS Administrator Seema Verma or CMMI Director Brad Smith over the past couple of months. Even with immediate coronavirus-related challenges within the health care system, both underscored the government’s commitment to value-based care during an October virtual presentation. 

“The Geographic Direct-Contracting Model is part of the Innovation Center’s suite of Direct-Contracting models and is one of the Center’s largest bets to date on value-based care,” Smith said in a statement from Thursday’s announcement. “The model offers participants enhanced flexibilities and tools to improve care for Medicare beneficiaries across an entire region while giving beneficiaries enhanced benefits and the possibility of lower out-of-pocket costs.”

By initially testing the new direct-contracting model in a small number of geographies, CMS and CMMI will be able to thoughtfully learn how emerging flexibilities are able to impact quality and costs, he added.

Under the model, participants will take upside and downside responsibility for Medicare beneficiaries’ health outcomes, giving them a direct incentive to improve care in their given markets.

Within each geographic region, participants with experience in risk-sharing arrangements and population health will partner with health care providers and community organizations to better coordinate care.

“The need to strengthen the Medicare program by moving to a system that aligns financial incentives to pay for keeping people healthy has long been a priority,” Verma said in a statement. “This model allows participating entities to build integrated relationships with health care providers and invest in population health in a region to better coordinate care, improve quality and lower the cost of care for Medicare beneficiaries in a community.”

Medicare beneficiaries in the model will remain in traditional Medicare, maintaining all of their benefits and coverage rights.

Organizations that participate in the new Geographic Direct-Contracting Model may create “a network of preferred providers, armed with the model’s enhanced flexibilities to provide the right care for beneficiaries at a lower cost,” according to CMS. That will certainly include home-based care businesses, many of which go by the mantra of delivering “the right level of care at the right time.”

Additionally, participants and preferred providers may choose to enter into alternative payment arrangements, including prospective capitation and other value-based arrangements.

In other words, home-based care providers may have a new runway to take off into value-based care.

“Beneficiaries may also receive enhanced benefits, including additional telehealth services, easier access to home care, access to skilled nursing care without having to stay in a hospital for three days, and concurrent hospice and curative care,” CMS noted in its announcement.

The Geographic Direct Contracting Model will have two three-year performance periods.

The first performance period will take applications in 2021 and have a performance period from Jan. 1, 2022, through Dec. 31, 2024. The second performance period will take applications in 2024 and have a performance period from Jan. 1, 2025, through December 31, 2027.

CMMI expects to release a request for applications for the first performance period in January.

The agency has already identified 15 “candidate regions” for the new model, each of which contains between roughly 150,000 to 700,00 Medicare beneficiaries. Those regions include major metropolitan such as Philadelphia and Pittsburgh in the eastern to U.S., to San Diego and Los Angeles in the West.

More information on the new model is available here.

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CMS Direct Contracting Model Options for Value-Based Care

CMS Direct Contracting Model Options for Value-Based Care
Vanessa Kuhn, Director of Health Policy, PatientPing

The Centers for Medicare and Medicaid Innovation (CMMI) created the Direct Contracting Model to expand opportunities for more diverse providers and healthcare organizations to participate in value-based care arrangements for Medicare fee-for-service (FFS) beneficiaries.

The goal of the new model is to create the next generation of risk-sharing arrangements to improve outcomes for patients, lower costs, and ensure high-quality care. In developing the Direct Contracting model and associated payment options, CMMI decided to build on lessons learned from accountable care initiatives, in particular, the Next-Generation ACO (NGACO) Model, as well as Medicare Advantage and other innovative private payers. The new model specifically aims to attract providers new to Medicare FFS and Innovation Center models: “the payment model options appeal to a broad range of physician practices and other organizations because they are expected to reduce burden, support a focus on beneficiaries with complex, chronic conditions, and encourage participation from organizations that have not typically participated in Medicare FFS or CMS Innovation Center models.”

High risk equals high reward for the new Direct Contracting Entities (DCE). The payment model options that participants can choose from aim to (1) increase risk-sharing arrangements through capitated and partially capitated population-based payments, (2) include providers and organization new to Medicare FFS, (3) increase access and empower beneficiaries in their care, and (4) decrease provider burden by emphasizing only core quality metrics and making certain care delivery waivers available. Importantly, the model offers options for new entrant DCEs, meaning DCEs that have no or limited experience with Medicare FFS beneficiaries and associated Medicare risk-based contracts, as well as high needs DCEs that will focus specifically on high cost, high acuity beneficiaries.

The Direct Contracting model begins with an optional six-month implementation period on October 1, 2020, which is intended to support organizations that need additional time to align beneficiaries and optimize their care coordination and management functions. In light of COVID-19’s overwhelming impact on healthcare this year, CMMI announced the first Direct Contracting Model performance year will start April 1, 2021—a three-month delay from the original start date, with five performance years to follow. The second cohort of Direct Contracting participants will begin in January 2022.

Risk-Sharing Options:

The Innovation Center will initially test two risk-sharing options: 

  1. Professional – includes a 50% shared savings/shared losses provisions and Primary Care Capitation, a capitated, risk-adjusted monthly payment for enhanced primary care services that’s equal to seven percent of the total cost of care benchmark for enhanced primary care services
  2. Global – is 100% full risk option with either Primary Care Capitation or Total Care Capitation, which is a capitated, risk-adjusted monthly payment for all services provided by Direct Contracting Participants and preferred providers. 

CMS may test a third option, the Geographic Option, in the future, which would also be a 100% risk arrangement offering an opportunity for participants to assume the total cost of care risk for Medicare FFS beneficiaries in a defined region.

Achieving Success in the Direct Contracting Model:

Similar to existing accountable care models, critical elements to achieve success in the Direct Contracting model include a focus on workflows, systems, and partnerships that support care coordination activities, including connections to needed healthcare and wrap-around services, as well as supporting providers in attaining quality benchmarks while managing overall utilization. Underlying these capabilities is access to real-time actionable information to drive timely interventions and coordination activities.  

Real-time information through admission, discharge, and transfer (ADT) event notifications for Emergency Department, hospital, or post-acute encounters enable care coordination teams to deploy workflows and resources to more easily and quickly support patients. Knowing when and where patients are receiving care and understanding the clinical context for their care allows providers and care teams to more seamlessly work together to provide the right care at the right time without unnecessary or duplicative interventions. It also allows care teams to identify patients at high risk for complications, including readmissions and can prompt time-sensitive outreach and connection to additional resources.  

Having access to real-time information can not only improve patient outcomes and quality but will also help to maximize payment incentives for Direct Contracting participants. Coordinated care consistently leads to shorter lengths of stay, which not only has positive quality implications for patients but also financial benefits for Direct Contracting Entities. 

In addition, healthcare organizations can use real-time information to continuously strengthen and refine care network partnerships and collaborations.

Bottom Line:

To effectively manage Medicare FFS patients within the Direct Contracting Model, participants will need to coordinate with other providers across care settings and deploy timely interventions that support patients’ health and well-being. Real-time information, through ADT data, will provide participants with a new level of clinical intelligence to successfully prioritize and deploy care coordination services and ensure seamless transitions of care for patients while also creating optimal opportunities to achieve shared savings.  


About Vanessa Kuhn, Ph.D

Vanessa Kuhn, Ph.D., is the Director of Policy at PatientPing, a care collaboration platform that provides real-time visibility into patient care events across the continuum. PatinetPing works with hospitals, post-acutes, health plans, ACO’s and beyond, the platform connects providers across the nation to improve patient and organizational outcomes.

Home Health Value-Based Purchasing Model Set for Nationwide Expansion in ‘Next Year or So’

The Center for Medicare & Medicaid Innovation (CMMI) is in need of a “course correction,” top U.S. health care officials believe.

And part of that may include a national expansion of the Home Health Value-Based Purchasing Model.

Created under the Affordable Care Act, CMMI — also known as the CMS Innovation Center — supports the development and testing of innovative health care payment models. Since its formation, CMMI has developed at least 54 payment models, including the Home Health Value-Based Purchasing Model.

As U.S. health care costs continue to rise, CMMI’s work has grown increasingly important, especially around value-based care, according to Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma. National health care spending is expected to grow at an average annual rate of 5.4% from 2019 to 2028, outpacing the gross domestic product’s average annual growth rate of 4.3%.

But of those 54 payment models, only a handful appear to be working.

In fact, just five have shown statistically significant savings.

“In 2019 alone, over 450,000 providers participated [in those models], serving over 26 million patients,” Verma noted. “But more recently, the evaluation data for the early models have been completed. And unfortunately, the results are deeply concerning.”

Verma addressed CMMI’s progress and the future of value-based care on Tuesday during a virtual event hosted by CMS’s Health Care Payment Learning & Action Network (LAN). Verma was joined by Brad Smith, who co-founded and served as CEO of home-based palliative care provider Aspire Health before being named CMMI’s director in January.

“The Center stands in need of a course correction in model design and portfolio selection, if value-based care is to advance,” Verma said.

Providers ‘must have skin in the game’

Shifting the U.S. health care system toward value-based care is one of CMS’s many priorities, Verma remarked during the virtual event. In addition to payment, value-based care also means providing pricing transparency, strengthening interoperability and minimizing paperwork burden for providers.

When it comes to establishing more successful value-based payment models, CMMI needs to prioritize two pillars, Verma said.

First, it must step back from voluntary models “designed with an abundance of financial carrots to attract participation.”

“Models must incorporate design elements that require participants to have skin in the game,” Verma said. “Models where providers have downside risks have actually performed better.”

Secondly, CMMI needs to do a better job of developing effective, meaningful benchmarks to measure the success of value-based payment models.

Smith echoed that idea, pointing out that CMS and CMMI have been too generous or lenient in judging how new payment mechanisms are performing.

“CMMI has learned a tremendous amount over the past 10 years about value-based care arrangements, and we are grateful for the tremendous participation we have had to date in our models,” Smith said at the LAN event. “As we move into the next phase of the Innovation Center, we believe we must push even harder to move more providers into value-based care payment arrangements.”

Expanding the Value-Based Purchasing Model

While most of Tuesday’s remarks took a hard look at what CMMI has accomplished thus far, both Verma and Smith did point out several positives.

Smith, for instance, called out the Home Health Value-Based Purchasing Model as one of the Innovation Center’s most successful efforts.

Implemented in 2016, the Value-Based Purchasing Model was designed to pay home health providers in nine states based on outcomes and the value of services delivered. This year was the sixth year of CMMI testing out the model, exposing home health providers to 6% upside or downside risk based on their performance.

Home health providers in participating states have mostly supported the value-base model, with many calling for a national expansion beyond the current states of Arizona, Florida, Iowa, Maryland, Massachusetts, Nebraska, North Carolina, Tennessee and Washington.

CMMI hasn’t hinted it has any plans to do so — until now.

“As we look at our portfolio, we have other models that we believe may be able to expand in the coming years,” Smith said. “For example, our Home Health Value-Based Purchasing Model has shown significant cost savings and improvement on key quality metrics. It’s one of the examples of the models that we’re looking at to think about if we could expand it nationally in the next year or so.”

Besides the Value-Based Purchasing Model, Verma and Smith likewise pointed to the relatively new Primary Cares Initiative and the related direct-contracting model as impactful value-based care efforts.

“Last year, we announced the CMS Primary Cares Initiative, featuring the direct contracting model, which has the potential to drive quality and value across the entire system in a way that we’ve never seen before,” Verma said. “Going forward, we believe direct contracting can take an exciting new step with a geographic option, in which a set of entities would take on full risk for all eligible Medicare beneficiaries in a certain region.”

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How ADT-Based E-Notifications Can Enable Better Safety for COVID-19 Patients

Why E-Notifications Are More Important Than Ever Amidst the COVID-19 Pandemic
Jay Desai, CEO & Co-Founder, PatientPing

As COVID-19 continues to impact the country, providers across the continuum face new challenges delivering care and ensuring safety for their patients and themselves.  During this period, sharing real-time information about patients’ care encounters across provider types and care settings matter more than ever. In particular, hospitals sharing admission, discharge, and transfer (ADT) events with COVID-19 patients’ community-based providers is critical to ensure the best treatment course and safer more seamless care transitions for infected and recovering patients. 

Real-time ADT-based notifications include information about a patient’s current care encounter, demographic details, information about the provider or institution sending the notification, and, as permissible, clinical information. This data enables providers across the continuum to make informed and coordinated decisions about their patients’ treatment and care transition plans. Even before the COVID-19 pandemic, the Centers for Medicare and Medicaid Services (CMS) recognized the importance of such ADT notifications in supporting patient care and finalized a new Condition of Participation (CoP) as part of the recently published Interoperability and Patient Access Final Rule (85 FR 25510). The CoP requires hospitals to share electronic patient event notifications, or e-notifications, with other community providers, such as primary care physicians (PCPs) and post-acute care providers, to facilitate better care coordination and improve patient outcomes. 

The necessity and benefit of these e-notifications has come into stark relief as providers and the healthcare system more broadly fight COVID-19. ADT-based e-notifications are an accessible and easy way to help enable better safety for COVID-19 patients and their providers while also ensuring efficient use and appropriate allocation of scarce resources. For example, ADT-based e-notifications can:

Enhance Safety for Patients Protecting patient safety and providing appropriate treatment is especially urgent during a crisis like COVID-19 when resources are limited and staff is stretched.  E-notifications allow hospitals that treat COVID-19 patients to more rapidly get in touch with a patient’s other providers and obtain important medical histories to help guide treatment and clinical decision-making.  Traditional exchange of data facilitated by phone calls, faxes, or labor-intensive data searches can introduce treatment delays, unnecessary or harmful interventions, and frustrations for providers. The faster information can be exchanged and a patient’s history is known by the hospital care team, the easier it is to effectively and safely treat the patient with the most appropriate interventions. 

Enhance Safety for Providers: Hospital e-notifications are especially important for post-acute and other community-based providers that will continue treatment for COVID-19 patients discharged from the hospital. Because e-notifications provide context about the patient’s most recent encounter, including diagnoses where permissible, they help guide the continuation of care.  Receiving e-notifications from hospitals allows such providers to appropriately prepare staff and put safety measures in place prior to treating COVID-19 patients. In particular, Skilled Nursing Facilities need time to properly and safely intake infected patients while Home Health Agencies need to prepare and equip their nurses for visits to homes of infected patients.

Open Hospital Beds for the Sickest Patients: Through real-time e-notifications, hospitals are able to more easily and quickly communicate and share information with COVID-19 patients’ other community-based providers who will care for recovering patients after they are discharged from the hospital. This exchange of information allows hospital care teams to more seamlessly and quickly transition recovering COVID-19 patients to the next level of care, which opens scarce hospital beds for the sickest patients.

Improve Care for COVID-19 Patients: Real-time e-notifications from hospitals allow PCPs and care coordinators to know when their patients have inpatient or ED events. In particular, discharge notifications can trigger critical follow-up services, including telehealth-based visits, to ensure COVID-19 patients recover safely and fully after they leave the hospital. Engaging COVID-19 patients after a hospitalization can help prevent readmissions and keep patients healthy in their homes. At the same time, PCPs are able to support the financial viability of their practices by being able to provide and bill for Transitional Care Management Services and ensure patient engagement in ongoing preventive and other clinical care.

Bolster Public Health Response: Aggregated and de-identified ADT-based notifications offer wide-ranging and powerful real-time data for local, state, and federal public health officials to detect emerging COVID-19 hotspots and intense ED, hospital, ICU strain.  Real-time data about the hospital and ED utilization can help public health officials direct and allocate scarce resources to the highest need areas quickly.

These are just some examples of how ADT-based e-notifications can play an important part in helping healthcare organizations effectively, efficiently, and safely deliver care for their patients during the ongoing pandemic – and beyond. 


About Jay Desai, CEO & Co-Founder, PatientPing

Jay started PatientPing in 2013 with one goal in mind: to connect providers everywhere to seamlessly coordinate patient care. Prior to founding PatientPing, Jay worked at the CMS Innovation Center (CMMI) where he helped develop ACOs, bundled payments, and other payment initiatives. Jay’s passion lies at the intersection of technology, policy, and community building. He has an MBA in healthcare management from Wharton and a BA from the University of Michigan.