CMS Publishes CY 2021 Home Health Prospective Payment System Proposed Rule

On June 30, 2020, the Centers for Medicare and Medicaid Services (CMS) published the proposed rule in the Federal Register for calendar year (CY) 2021 Home Health Prospective Payment System (HH PPS). The rule is effective January 1, 2021.

Each year, CMS publishes updates to the regulations for inflation factors, wage index adjustments, and other patient-care related payment adjustments.

Below is an overview of the CY 2021 HH PPS, including proposed changes and other relevant updates.

Proposed Changes for Home Health

CMS has proposed the following updates, payment policies, and payment rates.

Summary of Costs, Transfers, and Benefits

The below table, included by CMS in the proposed rule, outlines updates for provisions including Outcome and Assessment Information Set (OASIS), home infusion therapy services and supplier enrollment, and more.


National Adjusted Standardized Amounts

The standardized payment for HHAs is proposed to increase 2.7%.

Table 7: CY 2021 National, Standardized 30-Day Period Payment Amount

In addition, the home health update has a decrease of two percentage points for those HHAs that don’t submit quality data; therefore, for HHAs that don’t submit the required quality data for CY 2021, the home health payment update would be only an increase of 0.7%.

Table 8: CY 2021 National, Standardized 30-Day Period Payment Amount for HHAs That Don’t Submit the Quality Data

Per Visit Amounts

The per visit amounts for HHAs that submit the required quality data are also proposed to increase 2.7%.

Table 9: CY 2021 National Per Visit Payment Amounts

The per visit amounts for HHAs that don’t submit the required quality data are proposed to increase 0.7%.

Table 10: CY 2020 National Per Visit Payment Amounts for HHAs That Don’t Submit the Required Quality Data


CMS proposes to finalize the April 6, 2020, publication which will allow HHAs to continue to utilize telecommunications technology to provide care to beneficiaries beyond the COVID-19 Public Health Emergency Interim Rule (PHE). The care must be a covered Medicare home health benefit.

The requirements will be in effect as long as the telecommunications technology is:

  • Related to the skilled services being furnished
  • Outlined in the plan of care
  • Tied to a specific treatment goal indicating how such use would facilitate treatment outcomes

The use of technology may not be used:

  • To substitute an in-person visit required by the patient’s plan of care
  • As a visit for eligibility and payment

HHAs may continue to report the cost of telecommunications technology as allowable administrative costs on the HHA cost report beyond the PHE.

Wage Index Updates and Core-Based Statistical Area Designation

CMS proposes a transition with a one-year cap on wage index decreases in excess of 5%, consistent with the policy being proposed for other Medicare payment systems.

CMS proposes to update the home health wage index including the adoption of revised OMB statistical area delineations and limiting any decreases in a geographic area’s wage index value to no more than 5% in CY 2021.

The following classification changes will occur due to the proposed core-based statistical area (CBSA) revisions:

  • 34 counties currently classified as urban will be classified as rural
  • 47 rural counties will be reclassified as urban
  • Some counties will move from one CBSA to another

Additional Updates

CMS also proposes additional changes, including proposing to hold the low utilization payment adjustments (LUPA) thresholds and Patient-Driven Groupings Model (PDGM) case mix at the 2020 rates.

Economic Impact

The overall economic impact of this proposed rule is an estimated $540 million in increased payments from the US Federal Government to HHAs during CY 2021.

Per the rule, this increase reflects the effects of:

  • The proposed 2.7% home health payment update percentage—a $560 million increase
  • A 0.1% decrease in payments due to reductions made in the rural add-on percentages mandated by the Bipartisan Budget Act of 2018 for CY 2021—a $20 million decrease

Public Comments

Hospitals have the opportunity to submit their comments on the full CY 2021 HH PPS Proposed Rule, including notifying CMS of any inaccuracies in the data files used as part of the rule.

Public comments can be submitted no later than 5:00 p.m. Eastern Standard Time on August 31, 2020. Reference CMS-1730-P in your comment submission.

Before submitting comments, consult with the rule’s submission instructions so you adhere to the proper method.

We’re Here to Help

Contact your Moss Adams professional for more information about this proposed rule—including whether your country is changing status, name, or CBSA number—and possible implications for you and your organization.