CMS issues $15M in incentives for home health P4P demo

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The Centers for Medicare & Medicaid Services (CMS) is sharing more than $15 million in savings with 166 home health agencies (HHAs) based on their performance during the first year of the Medicare Home Health Pay for Performance (HHP4P) demonstration.

Beginning in January 2008 and ending in December 2009, the two-year program showed the impact of financial incentives on the quality of care provided to home health patients in traditional fee-for-service Medicare and their overall Medicare costs. Savings in the program are being shared with agencies that either maintained high levels of quality or made significant improvements in quality of care.

All Medicare-certified home health agencies in seven states representing four U.S. census regions were invited to participate in the demonstration, according to CMS. The Northeast region included HHAs in Connecticut and Massachusetts; the South included HHAs in Alabama, Georgia and Tennessee; and the Midwest and West regions included HHAs in Illinois and California, respectively.

Year One incentive payments are being made to 59 percent of the HHAs in the intervention group based on their performance and improvement on seven quality measures, the agency stated. In addition to the quality measures, the amount of the incentive paid to an individual HHA is also based on the total number of Medicare patient days associated with that HHA.

Medicare savings for the demonstration were determined by comparing total Medicare costs for beneficiaries receiving care from the intervention group's HHAs with the costs for beneficiaries served by the control groups HHAs in the same region.

According to CMS, if no savings were generated in a region, no incentive payments were made in that region. Results for 2008 indicated an aggregate Medicare savings of $15.4 million for three of the four regions; the Midwest region did not achieve any savings.

CMS stated it will calculate savings and determine which HHAs are eligible for incentive payments for 2009 later this year. In addition, the demonstration is still being evaluated, with results expected later in 2010.