Establishes requirements for incentive-based value payment system for home health agencies and health care service firms.

A4179

ASSEMBLY, No. 4179

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED FEBRUARY 19, 2026

Sponsored by:

Assemblywoman� CAROL A. MURPHY

District 7 (Burlington)

SYNOPSIS

���� Establishes requirements for incentive-based value
payment system for home health agencies and health care service firms.

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act

establishing an incentive-based value payment
system for home health agencies and health care service firms and supplementing
Title 30 of the Revised Statutes.

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

���� 1.��� a.���� The Division of
Medical Assistance and Health Services in the Department of Human Services
shall establish an incentive-based value payment system for licensed home
health agencies and registered health care service firms providing services to
NJ FamilyCare recipients enrolled in a Fully Integrated Dual Eligible Special
Needs Plan.� Participation in the incentive-based value payment system shall be
mandatory for home health agencies and health care service firms providing
services to NJ FamilyCare recipients enrolled in a Fully Integrated Dual
Eligible Special Needs Plan, and shall reward the home health agencies and
health care service firms for achieving improved performance outcomes. �The
division shall, no later than one year after the effective date of this act and
consistent with the recommendations of the Home Health Services Incentive-Based
Value Payment System Advisory Board submitted to the division pursuant to
subsection f. of section 4 of this act, adopt regulations, pursuant to the
�Administrative Procedure Act,� P.L.1968, c.410 (C.52:14B-1 et seq.), to
implement the incentive-based value payment system.

���� b.��� The division shall
establish a system to measure improved performance outcomes for Fully
Integrated Dual Eligible Special Needs Plan beneficiaries and rank
participating home health agencies and health care service firms based on how
well the agencies or firms achieve performance targets and realize improvements
in the following �Outcome and Assessment Information Set� measures:

���� (1)�� incidence of acute care
hospitalization, including preventable hospital admissions and readmissions;

���� (2)�� incidence of any
emergent care;

���� (3)�� patient bathing;

���� (4)�� patient ambulation or
locomotion;

���� (5)�� patient transfers,
including discharge planning during hospitalization and maintaining continuity
of care;

���� (6)�� collaboration between
primary care providers and other health care providers;

���� (7)�� management of
medications, including reconciliation of medications throughout the continuum
of care;

���� (8)�� status of surgical
wounds; and

���� (9)�� incidence of adverse
events.

���� c.���� The division shall
establish:

���� (1)�� performance targets for
improvements in each Outcome and Assessment Information Set measure set forth
in subsection b. of this section;

���� (2)�� a formula for
determining the baseline data against which the measurements shall be compared
when determining the level of improvement and cost savings achieved by each
home health agency and health care service firm; and

���� (3)�� the amount of the
incentive payments, which may include payment amounts scaled to the absolute
performance level and to the level of improvement achieved in each measurement.

���� d.��� The performance targets,
formula for determining baseline data, amounts of incentive payments and the
ranks for each participating home health agency and health care service firm
shall be made publicly available on the division�s Internet website, except
that nothing in this section shall be construed to permit or require disclosure
of any personal identifying or confidential information regarding any patient.

���� e.���� Each home health agency
and health care service firm participating in the incentive-based value payment
system shall:

���� (1)�� for each patient,
designate a single health care professional who is responsible for establishing
a plan of care for that patient and for coordinating person-centered services
throughout the continuum of care;

���� (2)�� develop protocols for
immediate follow up after discharge from a hospital, including a comprehensive
risk assessment;

���� (3)�� establish protocols to
facilitate collaboration with hospitals and other health care providers to
coordinate patient care throughout the continuum of services;

���� (4)�� establish protocols and
procedures to reconcile patient medications; and

���� (5)�� establish standards,
requirements, and programs to educate patients, families, and caregivers
regarding individualized plans of care and goals to address the unique needs of
each patient, family member, and caregiver.

���� f.���� The incentive-based
value payment system shall be administered by managed care organizations that
have contracted with home health agencies and health care service firms to
provide home health services to Medicaid and NJ FamilyCare recipients.� Managed
care organizations shall distribute incentive-based value payments to home
health agencies and health care service firms consistent with division
regulations.

���� g.��� The Department of Human
Services and each Medicaid managed care organization in the State shall provide
to the division all data concerning home health services provided in the State
as the division deems necessary for the purposes of establishing and evaluating
the incentive-based value payment system, including all data as may be required
to develop baseline data and to compare outcomes among home health agencies and
health care service firms throughout the State.� The division may authorize an
administrative fee to be paid to managed care organizations to offset the cost
of reporting data pursuant to this subsection, if that data is in addition to
data the organization currently reports to the State.

���� h.��� Commencing two years
after the effective date of this act, the division shall require an annual
audit of the incentive-based value payment system, which shall be performed by
an independent third party auditor.� The results of the audit shall be included
in the annual report required pursuant to paragraph (2) of subsection i. of
this section.

���� i.���� (1)� No later than one
year after the effective date of this act, the division shall report to the
Legislature, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), on the
projected benefits and costs of the incentive-based value payment system
established pursuant to this act.� In determining the costs and benefits of the
new system, the division shall cooperate with and consider input from home
health agencies, health care service firms, provider associations, managed care
organizations, and the Rutgers Center for State Health Policy.

���� (2)�� Commencing two years
after the effective date of this act, and annually thereafter, the division
shall report to the Legislature, pursuant to section 2 of P.L.1991, c.164
(C.52:14-19.1), on the status of the incentive-based value payment system,
including the costs of implementation, the number of participating home health
agencies and health care service firms, the size of each agency and firm, the
number of clients served by each agency and firm, the total cost savings
realized and the proportion of cost savings attributable to each agency and
firm, the amount of incentive-based value payments made to each agency and
firm, the proportion of total payments made that are received by each agency
and firm, an analysis of quality improvement and cost savings for each type of
service provided by agencies and firms, the division�s recommendations, if any,
concerning revisions to the incentive-based value payment system, and any other
information as may be necessary to evaluate the status of the incentive-based
value payment system.

���� 2.��� The Department of Human
Services shall appropriate no more than $10 million for the purposes of
establishing the incentive-based value payment system and making payments to
participating home health agencies and health care service firms pursuant to
this act.� Less any administrative costs to the division, incentive-based value
payments shall be distributed as follows:

���� a.���� Sixty percent of the
appropriation for the value-based incentive payments system shall be
distributed to those home health agencies and health care service firms that
are ranked by the division in the top 20 percent for absolute performance
level.

���� b.��� Forty percent of the
appropriation for the incentive-based value payments system shall be
distributed to those home health agencies and health care service firms that
are ranked in the top 20 percent for improvement in performance relative to
base year.

���� 3.��� The division shall
provide data received pursuant to subsection g. of section 1 of this act and
data reported by home health agencies and health care service firms concerning
their participation in the incentive-based value payment system to the Rutgers Center
for State Health Policy for the purposes of evaluating the system with regard
to patient outcomes, quality of patient care, cost savings, and such other
metrics as the division shall require.�

���� 4.��� a.� There is established
in the Department of Human Services the Home Health Services Incentive-Based Value
Payment System Advisory Board, which shall provide the Director of the Division
of Medical Assistance and Health Services with recommendations concerning the
regulations which are to be adopted pursuant to section 1 of this act.

���� b.��� The board shall comprise
eight public members to be appointed by the Governor.� The public members shall
include a representative from the Rutgers Center for State Health Policy, a
representative from a home care agency providing private duty nursing, a representative
from a home care agency providing personal care assistance, a representative of
the Home Care & Hospice Association of New Jersey, a finance professional
with a background in home care administration, a registered nurse who provides
long-term home health care services, a certified homemaker-home health aide,
and a representative from a Medicaid managed care organization.� The public
members shall be appointed no later than 30 days after the effective date of
this act.

���� c.���� The board shall
organize as soon as practicable following the appointment of its members and
shall select a chairperson and vice chairperson from among the members. The
chairperson shall appoint a secretary who need not be a member of the board.�
The board shall meet at such times as the chairperson shall designate.

���� d.��� Members of the board
shall serve without compensation, but shall be reimbursed for necessary
expenses incurred in the performance of their duties within the limits of funds
appropriated or otherwise made available to the board for its purposes.

���� e.���� The Department of Human
Services shall provide staff services and other necessary support to the board.

���� f.���� No later than six
months after the effective date of this act, the board shall submit to the
Director of the Division of Medical Assistance and Health Services its
recommendations concerning the requirements for home health agencies and health
care service firms participating in the incentive-based value payment system
established pursuant to this act, as well as any other matters for which the
director requests recommendations.� The board shall expire upon the adoption of
regulations pursuant to section 1 of this act.

���� 5.��� The Commissioner of
Human Services shall apply for such State plan amendments or waivers as may be
necessary to implement the provisions of this act and to secure federal
financial participation for State Medicaid expenditures under the federal
Medicaid program.

���� 6.��� This act shall take
effect immediately.

STATEMENT

���� This bill requires the
Division of Medical Assistance and Health Services in the Department of Human
Services (DHS) to establish an incentive-based value payment system to reward
home health agencies and health care service firms for achieving improved
performance outcomes in providing services to NJ FamilyCare recipients enrolled
in a Fully Integrated Dual Eligible Special Needs Plan.� Participation in the
incentive-based value payment system will be mandatory for any home health
agency or health care service firm providing services to these individuals.

���� The division will be required
to establish a system to measure improved performance outcomes and rank
participating home health agencies and health care service firms based on how
well the agencies or firms meet performance targets and realize improvements in
certain �Outcome and Assessment Information Set� measures, including: acute
care hospitalization and emergent care; patient bathing; patient ambulation or
locomotion; patient transfers, including discharge planning and maintaining
continuity of care; collaboration between primary care providers and other
health care providers; medication management; status of surgical wounds; and
adverse events.� The division will establish performance targets, a formula for
determining the baseline data for making performance comparisons, and the
amount of the incentive payments, which may include payments scaled to absolute
performance level and to the level of improvement achieved in each
measurement.�

���� The performance targets,
formula for determining baseline data, amounts of incentive payments and ranks
of participating home health agencies and health care service firms will be
made publicly available on the division�s Internet website.

���� Home health agencies and
health care service firms participating in the incentive-based value payment
system will be required to: designate, for each patient, a single health care
professional who is responsible for establishing a plan of care for that patient
and for coordinating person-centered services throughout the continuum of care;
develop protocols for immediate follow up after discharge from a hospital,
including a comprehensive risk assessment; establish protocols to facilitate
collaboration with hospitals and other health care providers to coordinate
patient care throughout the continuum of services; establish protocols and
procedures to reconcile patient medications; and establish standards,
requirements, and programs to educate patients, families, and caregivers
regarding individualized plans of care and goals to address the unique needs of
each patient, family member, and caregiver.

���� The incentive-based value
payment system is to be administered by managed care organizations (MCO) that
have contracted with home health agencies and health care service firms to
provide home health services to Medicaid and NJ FamilyCare recipients.�

���� The DHS and each MCO in the
State will be required to provide the division with any data necessary for the
purpose of establishing and evaluating the incentive-based value payment
system.� The division will be permitted to authorize an administrative fee to
be paid to MCOs to offset the cost of reporting any data that is in addition to
data the MCO currently reports to the State.� The division will provide these
data and any data reported by home health agencies and health care service
firms concerning their participation in the system to the Rutgers Center for
State Health Policy for the purposes of evaluating the system with regard to
patient outcomes, quality of patient care, cost savings, and such other metrics
as the division requires.�

���� The division will be required
to report to the Legislature concerning the status of the incentive-based value
payment system, including: the costs of implementation; the number and size of
participating home health agencies and health care service firms; the number of
clients served by each agency and firm; the total cost savings realized and the
proportion of cost savings attributable to each agency and firm; the individual
amounts and the proportion of total incentive-based value payments made to each
agency and firm; an analysis of quality improvement and cost savings by type of
service; the division�s recommendations, if any, concerning revisions to the
incentive-based value payment system; and any other information as may be
necessary to evaluate the system.� Commencing two years after the effective
date of the bill, an annual audit of the incentive-based value payment system
by an independent third party auditor will be required.� The results of the
audit will be included in the annual report.

���� The DHS may appropriate up to
$10 million for the purposes of establishing and making payments under the
incentive-based value payment system.� Less any administrative costs to the
division, 60 percent of the appropriated funds are to be distributed to home
health agencies and health care service firms which are ranked by the division
in the top 20 percent for absolute performance level, and 40 percent of the
appropriated funds are to be distributed to those home health agencies and
health care service firms which are ranked in the top 20 percent for
improvement in performance relative to base year.

���� The bill establishes the Home
Health Services Value Payment System Advisory Board, which is to provide the
Director of the Division of Medical Assistance and Health Services with
recommendations concerning the regulations which are to be adopted under the
bill.� The board will comprise eight public members appointed by the Governor.�
The members will serve without compensation, and the board will submit its
recommendations no later than six months after the effective date of the bill.�

���� The division will be required
to adopt regulations to implement the incentive-based value payment system,
consistent with the advisory board�s recommendations, within one year after the
effective date of the bill.� The board will expire upon the adoption of those regulations.