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We’re in Year One for the Expanded Home Health VBP Model – What Does That Mean for Home Health Services?

The expanded HHVBP Model includes Medicare-certified home health agencies in all 50 states


February 23, 2023 – After strong performance results in a trial model, the Expanded Home Health Value-Based Purchasing (HHVBP) model began its pre-implementation year on January 1, 2022 for home health agencies across the country. Just last month, on January 1, 2023, Performance Year 1 of the home health VBP model launched. 

In this blog, we are going to take an in-depth look at what trends we can expect to see in the Home Health industry because of the implementation of the HHVBP program, what consumers can expect in regard to their care, and some challenges facing the home health industry.

What is the Expanded Home Health VBP Model?

The Center for Medicare and Medicaid Innovation implemented the original Home Health Value-Based Purchasing (HHVBP) Model on January 1, 2016, and it ran until December 31, 2021. The model was launched in nine randomly selected states and was designed to support efforts to build a home health care industry that provided better care, lower costs, and resulted in healthier outcomes. 

On January 8, 2021, after years of successful and promising results, CMS announced the intent to expand the home health VBP model nationwide. Based on the results from prior years, a research and consulting firm estimated that a nationwide HHVBP model could result in $6.3 billion in savings over 10 years, while also leading to better care outcomes from Medicare beneficiaries under the program. 

Under the Expanded Home Health VBP model, CMS seeks to implement an incentive for providers to offer better care for home health care recipients. Under the fee-for-service model, Medicare beneficiaries that qualify for home health care often get uncoordinated and inadequate care for their conditions, which can result in more trips to the emergency room or admissions to the hospital. With the financial incentive placed on generating better health outcomes, the Expanded HHVBP model aims to improve the quality and efficiency with which home health care services are delivered to reduce trips to the hospital or admissions to skilled nursing facilities. 

Expanded HHVBP Quality Measures Focus on Quality of Care and Achieving Results

The expanded HHVBP model measure set will use data that HHAs already track and report through the Home Health Quality Reporting Program (HH QRP) requirements, Medicare claims, and HHCAHPS surveys.

There are three measure categories: OASIS, claims, and HHCAHOS survey-based measures. One of the five OASIS-based measures is Discharged to Community. This measure is the percentage of home health episodes after which patients remained in the community. Another OASIS-based measure is the Total Normalized Composite Change in Self-Care. This measure looks at the magnitude of change, positive or negative, for each of the is OASIS M items, which includes grooming, bathing, upper and lower body dressing, toilet hygiene, and eating. These two measures are important, as it looks at whether or not patients are able to remain in the community and care for themselves with the services of the HHA.

The two-claims based measures follow a similar sentiment. The first is Acute Care Hospitalization (ACH) During the First 60 Days of Home Health and the second is Emergency Department (ED) Use without Hospitalization During the First 60 Days of Home Health. These are based on home health stays for patients covered by Medicare FFS only and look at whether or not consumers are remaining at home after the start of the home health stay or if they are admitted to the hospital or emergency department. These measures are a good indicator of how efficient and effective the services of the HHAs are, as better coordinated and tailored services will allow consumers to remain healthy and in the comfort of their homes. 

The HHCAHPS survey-based measures capture the patient’s care experience. These look at not just the health outcomes, but how the patient views their care and the services of the HHA. Measures from the HHCAHPS survey include whether the patients reported that their HH team provided professional care, whether HH teams communicated well with them, rating of care, and willingness to recommend the agency to family and friends. These measures are extremely important because they capture how the consumer feels their care was and does not just look at outcomes.

How Does the Expanded HHVBP Model Impact the Home Health Industry?

Transitioning to value-based care models have long been the focus of CMS, and now with the Expanded Home Health VBP model, providers must make the switch. With the first performance year here, it’s a strong sign that VBP arrangements are here to stay and will become an increasingly larger part of the way home health agencies and providers do business. 

As a result, some of the bigger players in the healthcare industry are taking note and jumping into the home health arena. CVS Health recently acquired Signify to bolster the quality of their home health services. Other leaders like Humana, Inc. have stated that home health is going to be a key cog in their value-based care strategy. 

With large players recognizing that VBP is here to stay in the home health agency, consumers will start to see dollars shift towards expanding and improving home health services. This is important because without proper funding and investments, we will not see improved services and outcomes. 

Investing in employee training and retention is going to be paramount under the new HHVBP model. That is because under the HHVBP model, home health agencies earn payment adjustments, either upward or downward, based on performance across a variety of quality measures. Under the Expanded Home Health VBP model, the applicable percent ranges from -5% to 5%. That should provide some steadiness to a home health agency that was rocked by the COVID-19 pandemic, and signal to HHAs that if they perform well, it’s a good investment. 

If employees are not properly equipped, HHAs are understaffed, or employee turnovers is an issue, HHAs may not be able to provide quality care that beneficiaries deserve and thus underperform on quality measures. That impacts their payments, which impacts their financial bottom line. Quality staff is also important as patient-reported experienced through the HHCAHPS survey as included as quality measures. Even if a consumer is remaining at home and healthy, if they are not treated with compassion and kindness, HHAs can receive poor scores.

With all Medicare HHAs under the HHVBP model, they must invest in their employees and expand services, which should benefit the consumers and improve their overall quality of care. 

It is important to note that this is a huge shift for the home health industry. This focus on VBP payment arrangements will take some time to ramp up. This is true for both CMS in ironing out the program details as things progress and for HHAs to get up to speed with their understanding of the program and compliance measures. Hopefully over time, we will see quality of care improve and hospitalizations reduced, as CMS intends. 

Advocates Perspective

In a fee-for-service health system, Medicare beneficiaries that qualify for home health care often receive inadequate and uncoordinated care. This can result in more emergency room visits, more admissions to the hospital, or more placements in a skilled nursing facility. Through the Expanded Home Health Value-Based Purchasing Model that entered Performance Year 1 in 2023, CMS seeks to improve the quality and efficiency of home health care across the nation. The goal is to improve patients’ quality and care and lower healthcare costs. However, we must again reinforce the idea that this is a big change for the industry and the shift will take some time to ramp up. It is also important to note that this is only for Medicare beneficiaries, which we will cover in more detail in our next blog. We will keep following the advancement of the Expanded HHVBP model and report back with hopefully positive news in the future.


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About the Author

Fady Sahhar brings over 30 years of senior management experience working with major multinational companies including Sara Lee, Mobil Oil, Tenneco Packaging, Pactiv, Progressive Insurance, Transitions Optical, PPG Industries and Essilor (France).

His corporate responsibilities included new product development, strategic planning, marketing management, and global sales. He has developed a number of global communications networks, launched products in over 45 countries, and managed a number of branded patented products.

mandy sahhar

About the Co-Author

Mandy Sahhar provides experience in digital marketing, event management, and business development. Her background has allowed her to get in on the ground floor of marketing efforts including website design, content marketing, and trade show planning. Through her modern approach, she focuses on bringing businesses into the new digital age of marketing through unique approaches and focused content creation. With a passion for communications, she can bring a fresh perspective to an ever-changing industry. Mandy has an MBA with a marketing concentration from Canisius College.