CMS demonstration nets home health agencies $15 million in shared savings

More than 100 home health agencies that participated in the Centers for Medicare & Medicaid Services’ (CMS) Home Health Pay for Performance (HHP4P) demonstration will receive nearly $15 million in shared savings, according to a CMS announcement.

The HHP4P demonstration, conducted between January 2008 and December 2009, was undertaken to determine the impact of financial incentives on improving the quality of care provided to home health patients and the subsequent impact on overall Medicare costs. Any savings would be shared with agencies that either attained high levels of quality or made significant improvements in quality of care, according to CMS.

Savings were determined by comparing the rate of change in total Medicare costs for beneficiaries receiving care from home health agencies in the demonstration’s “intervention” group with the costs for beneficiaries served by agencies in the “control” group in the same region. These costs include Medicare payments for home healthcare, inpatient hospital care, nursing home and rehabilitation facility care, outpatient care, physician care, durable medical equipment and hospice care.

If no savings were generated in a region, no incentive payments were made in that region. However, improvements in quality of care may have resulted regardless of whether savings were achieved, CMS said in a release.

A total of 123 home health agencies out of 270 participating in the demonstration intervention group will receive incentive payments from savings based on their performance during the second year of the Medicare HHP4P demonstration. For Year 2, the demonstration calculated aggregate savings of $14.95 million for two of the four demonstration regions. The Midwest and the Northeast regions did not achieve any savings and were not eligible to receive incentives, according to CMS.

Agencies that volunteered for the HHP4P demonstration were randomly assigned to either the intervention or a control group. Performance was measured using seven home health quality measures that are computed from the Outcome-Based Quality Improvement data set.

Across all four regions of the country, a total of 172 participating agencies qualified for having high levels of quality on one or more measure(s) and 91 agencies qualified for significant quality improvement on one or more measure(s). The amount of the incentive paid to an individual agency is based on the total number of Medicare patient days associated with that agency.