The Centers for Medicare & Medicaid Services (CMS) announced a proposal to launch a new model designed to test whether incenties for better care can improve outcomes in the delivery of home health services.

The model is included in the CY 2016 Home Health Prospective Payment System proposed rule, which updates payments and requirements for home health agencies under the Medicare program.

The Home Health Value-Based Purchasing model is part of the Department of Health and Human Service’s commitment to build a healthcare delivery system that’s better, smarter, and healthier, according to the announcement.

“People want to be taken care of in their homes and communities whenever possible, and CMS aims to make sure that care in the home is supported by a value-based care delivery model that is consistent with the rest of the system. The goal is that no matter where the care is delivered, it is supported by a payment system that rewards providers who deliver the highest quality outcomes,” said Acting CMS Administrator Andy Slavitt. 

Authorized under the Affordable Care Act, the model leverages the successes of and lessons learned from other value-based purchasing programs and demonstrations-–including the Hospital Value-Based Purchasing Program and the Home Health Pay-for-Performance and Nursing Home Value-Based Purchasing Demonstrations. The model would apply a payment reduction or increase to current Medicare-certified home health agency payments, depending on quality performance, for all agencies delivering services within nine randomly-selected states. Payment adjustments would be applied on an annual basis, beginning at five percent and increasing to eight percent in later years of the initiative.

The proposed model is designed so there is no selection bias, participants are representative of home health agencies nationally, and there is sufficient participation to generate meaningful results among all Medicare-certified home health agencies nationally.

CMS will solicit comments until September 4, 2015.