As the 2026 Home Health Proposed Rule outlined (the Final Rule was delayed by the shutdown as of this writing), significant reforms are continuing to change our industry. VBP and HHCAHPS changes combine with meaningful payment cuts (>6%) to further challenge HH Providers who struggle to stay above water. PDGM recalibration includes new case weights, LUPA thresholds, and comorbidity sets that can affect payments. VBP changes combine per patient spending reporting with new measures and revised category rates. All of these changes place further stress on Home Health agencies when nearly half of all Providers currently report negative margins.
Most of our industry objects to the proposed changes, citing the troubled finances mentioned above. Under pressure to assure referral volumes, maintain staffing levels, develop timely care programs, manage VBP and create new levels of outcomes, the proposed payment cuts are often seen as in-appropriate and threatening the survival of HH Providers. Despite the objections of HH agencies, annual reimbursement reductions continue as Medicare evolves the Volume-to-Value (V2V) model introduced under PDGM and VBP. And as a result, many HH Providers continue to feel compromised in their ability to produce and deliver care to their patient populations.
Meanwhile,, MED PAC continues to focus on the Value identity of Home Health established with the V2V changes. Under PDGM’s value approach, rapid care changes are rewarded, efficient care management is required to eliminate waste, and volume practices compromise clinical and financial outcomes. Furthermore, PDGM education and installation was focused on the model’s structure and billing specifics, and the ability to transition to Value-based programs was generally unaddressed. So, agencies who retain Volume-era operations and culture find themselves behind the eight-ball in terms of Value-Based care programming. Their connection to PPS practices exposes them to volume costs and care processes Medicare considers unnecessary under PDGM, and resultantly they post negative margins. Medicare HH is headed down the Value path, while HH Providers who cling to the PPS model of operations often struggle to produce the episodic margins they seek. As might be expected, this makes any payment reductions appear as a threat to their survival.
Medicare Part A Providers outside of Home Health have confronted comparable V2V reforms and have responded assertively to transition their models for Value-Based care. When seeking answers to the ongoing V2V reforms, turning to solutions other Medicare Providers employ can produce successful clinical and fiscal outcomes that exceed PPS levels. Below, we will address how Home Health agencies can elevate their care production and delivery protocols by mimicking management processes of Part A Providers across the care continuum. Consider joining Home Health agencies who have achieved a successful V2V transition for success with PDGM and VBP accompanied by improved clinical outcomes and net fiscal margins.
CULTURE CHANGE FOR SUCCESS
The primary obstacle when transitioning to Value-Based Operations that employs Part A lessons is addressing the culture change required for success. Many elements of today’s HH culture are not seen in other Care sites: retro-active care management, clinician-led services, Missed (care) visits, Non-compliance, etc. Leadership from the top is required to address these items, and a positive approach to the integration of new protocols is essential. Assure ALL employees are oriented to the how’s and why’s of the changes, help them embrace care for better outcomes and manage throughout for improvements.
Looking to develop a structure for objective tracking, we establish Key Performance Indicator (KPI) Metrics to make care improvements our main focus. Weekly meetings with management and supervisory personnel to address updated KPIs help identify what areas need additional attention or assistance. Don’t allow any aspects of day-to-day agency management to impede or delay your progress.
Preparing for success with V2V Reforms – PDGM anD Vbp
Value reforms have aligned quality care production with fiscal opportunities under PDGM’s capitation and VBP’s financial bonus for elevated clinical outcomes. As a result, Home Health works under a form of the “Pay-for-Performance model” that has been discussed over the past 20 years. So when we employ operational protocols from outside of Home Health, we are able to fiscally reward ourselves for operational efficiencies and clinical improvements. As mentioned earlier, we regularly see net fiscal margins improvements >30% which allows for the absorption of the proposed payment cuts.
Establish baselines for KPIs for areas relevant to HH Care Production and VBP targets. Care Production targets includes HHRGs, LUPAs, Non-Admits (unconverted referrals), SN visit totals, FIL percentages, and Readmits. VBP targets include Timely SOC, Star Rating, ADLs, Dyspnea, Meds, Community DCs, PPF, and TPS/DFS scoring. Once you’ve established KPI baselines (and VBP-level goals) relevant to your agency, you’re ready to rewire care protocols to support objective improvements. This helps everyone involved connect to the V2V transition and the expectation of improvement.
The list below addresses relevant KPIs in rewiring your operations. KPIs will focus on value points of each item:
- Intake – Metrics focused on tracking ALL incoming referrals for timely response & capture rate. Conversion problems identified and addressed. Pre-admission Welcome calls made when referral accepted.
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- VBP – Timely SOC, Readmits.
- Fiscal – Payments for referrals produced by increased capture rate.
- Scheduling – Clinical visit schedules are turned in the prior week and kept accurate on a daily basis. Full productivity expected and KPIs are used to achieve. Staff unable to manage schedule has scheduling department create and manage schedule. PTO used for productivity shortfalls,
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- VBP – Timely SOC, Readmits.
- Fiscal – Full productivity
- Admission – Agency admissions occur in real-time collaboration (with QA/UR) with the admitting clinician. OASIS walk and Guidance Manual employed for 98% accuracy (vs. industry average of 72%) for refined acuity profile with FIL accuracy. Patient Rights & Responsibilities, Compliance, Missed Visits addressed
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- VBP – Accurate acuity for credit for Clinical Progress, establishes care program understood by Patient/CGVR, plots rapid results POC
- Fiscal – Accurate OASIS acuity increases case-Mix & HHRG payments (>20%)
- POC Development – Value-Based POC with Freq/Dur orders developed collaboratively for rapid results for all disciplines.
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- VBP – decreased visit totals for Nursing and Rehab (2nd to FIL accuracy), standardizes Provider Care approach, decreased LUPAs and non-admits.
- Fiscal – fiscal savings due to decreased visits (5 SN visit avg with 4.5 Star, VBP Bonus, 6% readmits), LUPAs and non-admits
- In-Episode Management (IEM) – costly Case Conferences eliminated (unseen by any other Part A Providers), Successful capitated care requires POC adaption in response to patient response to treatment, IEM is performed through clinical rounds per clinician with documentation review
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- VBP – elevates care content and documentation thereof as clinical rounds based on (timely) clinical notes required for continued programming
- Fiscal – savings created as utilization matching current care status saves visits and standardizes efficient programs
- Discharge Management – Discharges occur only with agency approval after documentation review, assures care credit received at Discharge 2nd to OASIS Accuracy
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- VBP – Assures care program matches and delivers goals prior to DC, focuses on VBP targets
- Fiscal – Savings from decreased visit totals and VBP care credit
Employing KPI METRICS to ACHIEVE pDGM – VBP SUCCESS
After completing the KPI baselines and establishing weekly meetings to track progress, focus should be on the specific metrics with attention to obstacles for improvement. Strategies to address ongoing improvements should be followed on a weekly basis to ensure positive movement. In some cases, daily reports are established to further drill down on problem areas, and improvements are celebrated. Be prepared for individual employee response to these objective changes, and help struggling personnel through the transition.
HH Providers regularly obtain elite-level outcomes by the Operational rewiring described above. Those Agencies are able to absorb the reform-based payment cuts without difficulty by evolving their care processes for success in the Value Era. Embrace the V2V model starting today and begin your trip down the care path to Success.