By Michelle Bedoya

According to the 2016 Home Health Final Rule, published on November 5, 2015, the Centers for Medicare and Medicaid Services (CMS) is launching a value-based purchasing (VBP) pilot program for Medicare home health care agencies (HHA). The VBP model is designed to support greater quality and efficiency of care among Medicare-certified HHAs across the nation.  Starting on January 1, 2016, HHAs in nine states representing each geographic area in the nation will be required to participate in the VBP program. HHAs that provide services in Massachusetts, Maryland, North Carolina, Florida, Washington, Arizona, Iowa, Nebraska and Tennessee will compete on value in the VBP model, where payment is tied to quality performance.

What Exactly is Value-Based Purchasing?

CMS launched the VBP model due to the growing concern that the existing payment system (which focuses on volume of services provided) does not provide the necessary incentives for HHAs to provide high quality patient-focused care. The VBP model is considered to be an innovative step towards revamping how Medicare pays for health care services, moving the program towards rewarding HHAs for better value, outcomes and patient-focused care. HHAs will compete where payment is tied to quality performance and will then have their payments adjusted in the following manner:

–    A maximum payment adjustment of 3 percent (upward or downward) in 2018;

–    A maximum payment adjustment of 5 percent (upward or downward) in 2019;

–    A maximum payment adjustment of 6 percent (upward or downward) in 2020;

–    A maximum payment adjustment of 7 percent (upward or downward) in 2021; and

–    A maximum payment adjustment of 8 percent (upward or downward) in 2022.

The Bottom Line: VBP Payment Changes.

The VBP model will adjust aggregate claim payments up to the maximum percentage for each year. As a result, high performing HHAs will experience a greater reward whereas, low performing HHAs will experience a greater downside risk. Payment adjustments for each year will be calculated on improvements achieved and on comparative performance achievement levels. Adjustments will be based on each HHA’s performance relative to other competing agencies of similar size in the same state.

What Providers Should Do NOW.

HHAs participating in the VBP model are encouraged to:

(a)    Establish their HHA VBP point of contact by providing the HHVBP Help Desk ( with the name and email address of a primary point of contact for each CMS Certification Number (CCN).

(b)    Obtain a User Account on the CMS Secure Portal. This is an essential first step towards registration for the VBP Model portal where HHAs will receive performance reports and enter data for new measures.

(c)    Review the CY 2016 Home Health Final Rule here.


The post-Affordable Care Act environment enables CMS to facilitate a complete turnaround of the home health industry. Due to the launching of VBP models, HHAs are compelled to review and reinvent their standard operating practices. Providers must develop a sense of urgency to review their current operating structure and adapt operations according to ensuing reforms.

Still Want to Know More?

Consult with a Health Law Attorney Experienced in Medicare and Medicaid Issues Now.

The attorneys of The Health Law Firm represent health care providers in Medicare audits, ZPIC audits and RAC audits throughout Florida and across the U.S. They also represent physicians, medical groups, nursing homes, home health agencies, pharmacies, hospitals and other health care providers and institutions in Medicare and Medicaid investigations, audits, recovery actions and termination from the Medicare or Medicaid Program.

For more information please visit our website at or call (407) 331-6620.


Medicare and Medicaid Programs; CY 2016 Home Health Prospective Payment System Rate Update; Home Health Value-Based Purchasing Model; and Home Health Quality Reporting Requirements, 80 F.R. 68623 (proposed Nov. 5, 2015) (to be codified at 42 C.F.R. pt. 409).

“Home Health Value-Based Purchasing Model.” The Centers for Medicare & Medicaid Services. (December 10, 2015). Web.

About the Author: Michelle Bedoya is a long-time consultant to home health agencies and is currently a graduating senior at Barry University School of Law.  She currently works, as well, for The Health Law Firm, which has a national practice.  Its main office is in the Orlando, Florida area. The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.

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