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Analysis of New Rural Add-On Payment Methodology

Section 50208 of the Bipartisan Budget Act of 2018 (the BBA) extended rural add-on payments for home health episodes and visits ending during calendar years (CYs) 2019 through 2022, and mandated implementation of a new methodology for applying those payments. Beginning in CY 2019, rural add-on payments were provided in varying amounts according to classification in one of three rural categories: (1) high utilization, (2) low population density, and (3) all other. The BBA requires home health claims to indicate the code for the county in which the home health service is provided. CMS has instructed providers to use value code 85 to report the county code and will return claims for correction when the code is missing or invalid. The BBA also mandated that, no later than January 1, 2023, HHS-OIG submit to Congress an analysis of Medicare home health claims and utilization of home health services by county (or equivalent area) and recommendations, as appropriate, based on such analysis. To meet that mandate, we will perform an analysis of Medicare home health claims for CYs 2019 through 2021. We will trend the claim data and cost reports to determine what impact, if any, the new rural add-on methodology has had on home health agency providers and the utilization of home health services in rural areas.

Announced or Revised Agency Title Component Report Number(s) Expected Issue Date (FY)
July 2020 Centers for Medicare and Medicaid Services Analysis of New Rural Add-On Payment Methodology Office of Audit Services W-00-20-35850 2021