CMS Finalizes PDGM: PPS Final Rule Increases HHA's Payments for 2019

PPS final rule increases agencies’ payments for 2019, finalizes PDGM


Wednesday, October 31, 2018, according to Decision Health, CMS has finalized a plan to launch a budget-neutral payment model for home health that utilizes 30-day periods of care and stops using the number of therapy visits to determine payment. That’s according to the 2019 PPS final rule posted Oct. 31 on the Federal Register website. The Patient-Driven Groupings Model (PDGM) will launch “on or after” Jan. 1, 2020, according to the final rule. That language differs from the proposed rule, when CMS indicated PDGM would start on Jan. 1, 2020 (Decision Health, 2018).

Additionally, another major change with the final rule is that PDGM will have 432 HHRGs – which is of course double the number of HHRGs outlined in the proposed rule. Home health agencies have spoken and CMS has listened. The change is also likely to the 12 clinical groups that capture the most common primary diagnoses in home health. In the proposed rule, CMS only had sought six clinical groups: musculoskeletal rehabilitation, neuro/stroke rehabilitation, wounds, behavioral health care, complex nursing interventions and medication management, teaching and assessment (MMTA) (Decision Health, 2018).

CMS wrote, “We note that although we are categorizing patients into [12] groups according to the principal diagnosis, these groups do not reflect all the care being provided to the home health patient during a 30-day period of care,” CMS states in the final rule. “Home health care remains a multidisciplinary benefit. Additionally, as stated in the CY 2019 HH PPS proposed rule, we will continue to examine trends in reporting and resource utilization to determine if future changes to the clinical groupings are needed after implementation of the PDGM in CY 2020” (Decision Health, 2018).

Payments to Rise in 2019

Decision Health writes, “Adjustments to Medicare’s home health payments under the final rule will increase agencies’ total reimbursement by 2.2%, or $420 million. What this increase means is that the effects of a 2.2% home health payment update percentage are now reflected from a 0.1% increase in payments due to decreasing the fixed-dollar-loss ration mandated by the Bipartisan Budge Act of 2018. Additionally, in order to pay no more than 2.5% total payments as outlier payments, a 0.1% decrease in payments due to the new rural add-on policy by the mandate.

In contrast, the 2018 PPS final rue included a 0.4% or $80, payment reduction.

The PPS final rule for 2019 now opens the  door for home health agencies to get paid by Medicare Part B to administer home infusion therapy for certain payments who don’t qualify for the home health benefit. However, that change would not benefit home health agencies until 2021.

Other Changes Finalized in the Rule

  • No more requirement for a physician estimate – On or after Jan. 1, 2019 the requirement that the certifying physician estimate are required to estimate how much longer skilled services are needed for continued care. Thank you CMS.
  • Value-base purchasing changes (again) – Among the biggest changes to value-based purchasing is CMS’ decision to remove two OASIS-based measures and replace three other, existing OASIS-based measures with two new composite measures designed to evaluate improvement in activities of daily living (ADLs) (Decision Health, 2018).
  • Remote patient monitoring update – It seems CMS is embracing innovation and modernization of health care by allowing the cost of remote patient monitoring to be reported by home health agencies as allowable coast on the Medicare cost report. CMS stated in the final rule, “This is expected to help foster the adoption of emerging technologies by home health agencies and result in more effective care planning, as data are shared among patients, their caregivers and their providers” (Decision Health, 2018).

Read the final PPS rule at:


Centers for Medicare & Medicaid Services (2018). Center for Clinical Standards and Quality /Quality, Safety & Oversight Group. Department of Human and Health Services. Retrieved from:
Cornell Law School (2018). 42 CFR 484.60 – Condition of participation: Care planning, coordination of services, and quality of care. Legal Information Institute. Retrieved from:

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