Home health agencies will receive $130 million less in Medicare reimbursements for 2017, the final year of reductions meant to recoup overpayments dating back to 2000.

The 0.7 percent drop is lower than what CMS proposed in July. The original cut in reimbursement would have been 1 percent, or $180 million. As mandated by the Affordable Care Act, the agency made up for the older overpayments to home health agencies with four years of reductions: $200 million in 2014, $60 million in 2015 and $260 million this year.

With the phase-in complete, home health agencies may see an increase next year. By itself, the 2.5 percent update to reimbursement included in the final rule would have raised payments by $450 million.

The final rule also includes updates to the home health quality reporting program, adopting four measures beginning with the 2018 payment determination year:

• Potentially Preventable 30-Day Post-Discharge Readmission Measure for Post-Acute Care Home Health Quality Reporting Program
• Total Medicare Spending per Beneficiary - Post Acute Care Home Health Quality Reporting Program
• Discharge to Community- Post Acute Care Home Health Quality Reporting Program
• Drug Regimen Review Conducted with Follow-Up for Identified Issues-Post-Acute Care Home Health Quality Reporting Program

A new value-based purchasing model is also finalized in the rule. Called the Home Health Value-Based Purchasing (HHVBP) Model, the pilot program involves adjusting payment on performance measures in nine participating states: Arizona, Florida, Iowa, Maryland, Massachusetts, Nebraska, North Carolina, Tennessee and Washington. For the first year of the program in 2018, adjustments will be capped at 3 percent upward or downward.