Payment Rules

Medicare and Medicaid rates are set yearly and are finalized with the annual Home Health Prospective Payment System Rate Update final rule, published in the Federal Register in late fall each year.  Medicaid rates differ from Medicare rates and are published through a CMS letter to state agencies in September of each year.

CMS finalized a new case-mix classification model, the Patient-Driven Groupings Model (PDGM), effective January 1, 2020. The PDGM relies more heavily on clinical characteristics, and other patient information to place home health periods of care into meaningful payment categories.  One case-mix variable is the assignment of the principal diagnosis to one of 12 clinical groups to explain the primary reason for home health services. 30-day periods are categorized into 432 case-mix groups for the purposes of adjusting payment under the PDGM. In particular, 30-day periods are placed into different subgroups for each of the following broad categories:

• Admission source (two subgroups): community or institutional admission source
• Timing of the 30-day period (two subgroups): early or late
• Clinical grouping (twelve subgroups): musculoskeletal rehabilitation; neuro/stroke rehabilitation; wounds; Medication Management, Teaching, and Assessment (MMTA)
  • surgical aftercare; MMTA – cardiac and circulatory; MMTA – endocrine; MMTA -gastrointestinal tract and genitourinary system; MMTA – infectious disease, neoplasms, and blood-forming diseases; MMTA – respiratory; MMTA- other; behavioral health; or complex nursing interventions
• Functional impairment level (three subgroups): low, medium, or high
• Comorbidity adjustment (three subgroups): none, low, or high based on secondary diagnoses.

This link provides access to the Centers for Medicare & Medicaid Services (CMS) Federal Register notices related to the proposed and final Home Health Prospective Payment System (HH PPS) rules for fiscal and calendar years 2000 to the present.