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Reimbursement Rate Changes in Effect for Home Health Providers

By Michael Criscione, Elizabeth DeRita .

The Centers for Medicare & Medicaid Services (CMS) FY2021 Home Health Final Rule: 
Excerpts from Federal Register 11/4/2020 

CMS FY2021 – Effective 1/1/2021

  • This final rule updates payment rates for home health agencies for calendar year 2021 (CY 2021) as required under section 1895(b) of the Social Security Act (the Act), including case-mix weights under section 1895(b)(4) of the act for 30-day periods of care.
  • As discussed in the September 14, 2018 Office of Management and Budget (OMB) Bulletin 18-04, the OMB has finalized revisions to the delineations of Metropolitan Statistical Areas (MSAs). Furthermore, changes were made to Core-Based Statistical Area (CBSA) geographic designations, such that some urban counties have become rural, some rural counties have been urban and some existing CBSAs have been split apart.
    • Due to the changes to the OMB delineations, and the resulting changes to the wage index values, CMS has imposed a 5% cap on the overall decrease in a geographic area’s wage index value for CY 2021 only for impacted counties effective January 1, 2021.
    • Final home health wage index tables, including a crosswalk between the current and previous OMB delineations are available through the Internet. They can be found on the CMS Web site at:
  • Due to 2020 being the first year of new case-mix adjustment methodology, there is not sufficient data to make any changes to the low utilization payment adjustment (LUPA) thresholds or case mix weights for CY 2021. Therefore, the LUPA thresholds and case-mix weights for 2020 will be maintained for CY 2021. A link to the LUPA thresholds and case-mix weights for CY 2021 is as follows:
  • For CY 2021, the final home health payment update percentage is 2.0%, which represents the market basket increase of 2.3%, less 0.3% for nonfarm business multifactor productivity, and has taken into consideration macroeconomic data through the third quarter of 2020, as well as the uncertainty due to COVID-19.
    • Home health agencies that fail to submit the required quality data, as applicable, in accordance with Section 1895(b)(3)(B)(v) of the Social Security Act for a fiscal year, will receive a 2.0 percentage point reduction to their market basket update for the fiscal year involved, and will therefore receive a 0.0% increase.
  • Effective January 1, 2021, the national standardized 30-day period payment rate will be $1,901.12 for a home health agency that complies with quality data reporting.
  • National per-visit payment rates for home health agencies that comply with quality data reporting is as follows:


  • No changes to the Home Health Quality Reporting Program were proposed at this time.
  • This rule also finalizes the proposal to require that any provision of remote patient monitoring or other services furnished via a telecommunications system or audio-only technology must be included on the plan of care and must be tied to a patient-specific need. Use of this technology cannot serve as a substitute of a home visit for purposes of eligibility or payment.
    • For cost reporting purposes, home health agencies can report the costs of telehealth/telemedicine as allowable administrative costs on line 5 of the Medicare cost report. The cost report instructions have been modified to reflect a broader use of telecommunications technology.
  • Beginning January 1, 2021 a permanent payment system for home infusion therapy services under section 5012 of the 21st Century Cures Act will be implemented for services rendered after this date.
  • The overall economic impact of the final rule is an estimated increase 1.9% or $390 million in aggregate payments to home health agencies during 2021.

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