CMS Finalizes CY 2021 Payment and Policy Changes for Home Health Agencies

Posted on Friday, October 30, 2020

On Thursday, CMS released the CY2021 Final Medicare home health rule and the new rule brings little change from the proposed rule. The major change is a reduction of the annual update of payment rates to 2.0 percent as a result of applying more recent data in the Market Basket Index. The proposed rule set the update at 2.7 percent, using a 3.1 percent inflation update and a 0.4 percent Productivity Adjustment.

Payment Rates for 2021

Here are some of the details on the 2021 reimbursement standards:

  • Base payment rates are increased by a net Market Basket Index of 2.0%. An annual inflation update of 2.3% is reduced by a 0.3% Productivity Adjustment to net at 2.0%.  The results is that:
  • The base 30-day payment rate is increased from $1864.03 to $1901.12 after application of wage index budget neutrality factor of 0.9999. HHAs that did not submit required quality data have that rate reduced by 2%.
  • The LUPA per visit rates are set at:

o   SN  $152.63

o   PT   $166.83

o   SLP $181.34

o   OT  $167.98

o   MSW $244.64

o   HHA $69.11

  • LUPA rates are also reduced by 2% for those HHAs that did not submit required quality data.
  • The LUPA add-on for LUPA only patient continues. For example, for SN as the first LUPA visit the add-on results in a first visit payment of $281.62. Each discipline would get its own add-on rate.
  • The area Wage Index that applies based on the patient’s residence has changed significantly to reflect update census information. Due to the significant change, CMS caps any reduction in the wage index at 5%. There is no cap on wage index increases.
  • The Outlier Fixed Dollar Loss ratio stays a 0.56. That would mean that no increase or decrease in the national volume of outlier episodes is expected.
  • The rural add-on phase-out continues

o   High Utilization areas—- 0% add-on

o   Low Population Density areas—2% add-n

o   All other areas—–1% add-on

  • The PDGM case mix weights and LUPA thresholds stay at the 2020 levels
  • CMS maintains it RAP and NOA policy which will include a penalty for late filing in 2021 and later years when filed after 5 days. The penalty is a payment denial for each day from the start of the episode until the date of filing.


Source: NAHC and click here to read the press release


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