Reduction in Medicare Payments to Home Health
Agencies Proposed for 2015
CMS explains details that will save $60 million in
program that cost $18 billion in 2013
30, 2014 - The Centers for Medicare & Medicaid Services (CMS) today
announced changes to the Medicare home health care prospective payment
system (HH PPS) for calendar year 2015 that are expected to reduce
payments to home health agencies next year by 0.30 percent, or $60
million. The program cost Medicare $18 billion in 2013.
The CMS news release says the proposal “will foster
greater efficiency, flexibility, payment accuracy, and improved
Approximately 3.5 million beneficiaries received
home health services from nearly 12,000 home health agencies.
CMS explained that this decrease reflects the
effects of the 2.1 percent home health payment update percentage ($390
million increase) and the second year of the four-year phase-in of the
rebasing adjustments to the national, standardized 60-day episode
payment rate, the national per-visit payment rates, and the non-routine
medical supplies (NRS) conversion factor (2.4 percent or $450 million
“The rule implements increases to the national
per-visit payment rates, a 2.82 percent reduction to the NRS conversion
factor, and a reduction to the national, standardized 60-day episode
rate of $80.95 for CY 2015. The national, standardized 60-day episode
payment for CY 2015 is $2,961.38,” the news release stated.
“The HH PPS final rule is one of several rules for
calendar year 2015 that reflect a broader Administration-wide strategy
to deliver better care at lower cost by finding better ways to deliver
care, pay providers, and use information.
“Provisions in these rules are helping to move our
health-care system to one that values quality over quantity and focuses
on reforms such as measuring for better health outcomes, focusing on
disease prevention, helping patients return home, helping manage and
improve chronic diseases, and fostering a more-efficient and coordinated
health care system.
“For example, the Home Health Agency (HHA)
Value-based Purchasing (VBP) model that is introduced in this rule would
be an opportunity to test whether carefully designed payment incentives
would lead to higher quality of care for beneficiaries.”
CMS released the following information to explain
how the home health benefit works in Medicare.
Background by CMS
To qualify for the Medicare home health benefit, a
Medicare beneficiary must be under the care of a physician, have an
intermittent need for skilled nursing care, require physical therapy or
speech-language pathology, or continue to need occupational therapy. The
beneficiary must be homebound and receive home health services from a
Medicare-approved home health agency (HHA).
Medicare pays home health agencies through a
prospective payment system that pays higher rates for services furnished
to beneficiaries with greater needs. Payment rates are based on relevant
data from patient assessments conducted by clinicians as currently
required for all home health agencies participating in Medicare. Home
health payment rates are updated annually by the home health payment
update percentage. The payment update percentage is based, in part, on
the home health market basket, which measures inflation in the prices of
an appropriate mix of goods and services included in home health
Face-to-face encounter requirements
The Affordable Care Act requires that the
certifying physician or allowed non-physician provider (NPP) must have a
face-to-face encounter with the beneficiary before they certify the
beneficiary’s eligibility for the home health benefit. Current
regulations require the encounter occur within 90 days before care
begins or up to 30 days after care began. Documentation of the encounter
must include a narrative to explain why the clinical findings of the
encounter support that the patient is homebound and in need of skilled
In this rule, CMS is finalizing three changes to
the face-to-face encounter requirements for episodes beginning on or
after January 1, 2015. These changes will reduce administrative burden
and provide home health agencies with additional flexibilities in
developing individual agency procedures for obtaining documentation
supporting patient eligibility for Medicare home health care.
First, CMS is eliminating the narrative requirement
currently in regulation. The certifying physician would still be
required to certify that a face-to-face patient encounter occurred and
document the date of the encounter as part of the certification of
eligibility. For medical review purposes, we will require documentation
in the certifying physician’s medical records and/or the
acute/post-acute care facility’s medical records (if the patient was
directly admitted to home health) to be used as the basis for
certification of patient eligibility.
Second, CMS is finalizing that if a HHA claim is
denied, the corresponding physician claim for certifying/re-certifying
patient eligibility for Medicare-covered home health services is
considered non-covered as well because there is no longer a
corresponding claim for Medicare-covered home health services.
Lastly, CMS is clarifying that a face-to-face
encounter is required for certifications, rather than initial episodes;
and that a certification (versus a re-certification) is generally
considered to be any time a new start of care assessment is completed to
CMS is finalizing the elimination of the 13th and
19th visit reassessment requirements. For episodes beginning on or after
January 1, 2015; at least every 30 calendar days a qualified therapist
(instead of an assistant) must provide the needed therapy service and
functionally reassess the patient. This policy change will lessen the
burden on HHAs of counting visits and reduce the risk of non-covered
visits so that therapists can focus more on providing quality care for
their patients, while still promoting therapist involvement and quality
treatment for all beneficiaries regardless of the level of therapy
Recalibration of the HH
PPS case-mix weights
CMS is recalibrating the HH PPS case-mix weights
using CY 2013 home health claims data to ensure that the case-mix
weights reflect the most current utilization and resource data
Core Based Statistical
Area (CBSA) changes for the HH wage index
In Feb. 2013, the Office of Management and Budget
(OMB) issued a bulletin that contained a number of significant changes
related to the delineation of Metropolitan Statistical Areas,
Micropolitan Statistical Areas, and Combined Statistical Areas, and
guidance on uses of the delineation of these areas. CMS is finalizing
changes to the wage index based on the revised CBSA delineations for the
CY 2015 HH PPS wage index. These changes will be made to the wage index
using a blended wage index for a one-year transition. For each county, a
blended wage index is calculated as 50 percent of the CY 2015 wage index
using the current OMB delineations and 50 percent of the CY 2015 wage
index using the revised OMB delineations.
Home health payment update
The Affordable Care Act requires that the market
basket update for HHAs be adjusted by changes in economy-wide
productivity for CY 2015 (and each subsequent calendar year). The CY
2015 home health market basket (2.6 percent) adjusted for multifactor
productivity (0.5 percentage points) results in a 2.1 percent payment
Rebasing the 60-day
The Affordable Care Act directs that beginning in
CY 2014, CMS apply an adjustment to the national, standardized 60-day
episode rate and other applicable amounts to reflect factors such as
changes in the number of visits in an episode, the mix of services in an
episode, the level of intensity of services in an episode, the average
cost of providing care per episode, and other relevant factors.
Additionally, CMS must phase-in any adjustment over a four year period,
in equal increments, not to exceed 3.5 percent of the amount (or
amounts) as of the date of the enactment of the Affordable Care Act (CY
2010), and be fully implemented by CY 2017. CY 2015 will be the second
year of the four year phase-in for rebasing adjustments to the HH PPS
Home Health Quality Reporting Program (HH QRP)
The Home Health Conditions of Participations (CoPs)
require HHAs to submit OASIS assessments as a condition of payment and
also for quality measurement purposes. HHAs that do not submit quality
measure data to CMS will see a two percent reduction in their annual
payment update (APU). In this rule, CMS has established a minimum
submission threshold for the number of OASIS assessments that each HHA
Beginning in CY 2015, the initial compliance
threshold will be 70 percent. This means that HHAs will be required to
submit both admission and discharge OASIS assessments for a minimum of
70 percent of all patients with episodes of care occurring during the
reporting period. CMS will increase the compliance threshold over the
next two years to reach a maximum threshold of 90 percent.
Conditions of Participation for speech-language
CMS has revised the Home Health Conditions of
Participation (CoPs) for speech language pathologist (SLP) personnel.
Now, a qualified SLP is an individual who meets one of the following
requirements: a) has a masters’ or doctoral degree in speech-language
pathology, and is licensed as a speech-language pathologist by the state
where they furnish services (CMS believes that all states license SLPs;
therefore all SLPs would be covered by this option); or b) has
successfully completed 350 clock hours of supervised clinical practicum
(or be in the process of completing these hours), has at least nine
months of supervised full-time speech-language pathology experience, and
has successfully completed a national examination approved by the
Secretary. These requirements, which align with the requirements in the
Social Security Act, will replace the current stringent requirements
with a more flexible option that defers to State licensure requirements.
Home Health Value-based Purchasing Model
CMS received comments on a potential HHA VBP model
that it may begin testing in CY 2016. CMS will review these comments as
it considers testing a HHA VBP model. CMS has already successfully
implemented the Hospital VBP program where 1.5 percent of hospital
payments in FY 2015 are tied to the quality of care that the hospitals
provide. This percentage amount will gradually increase to two percent
in FY 2017 and subsequent years.
The HHA VBP model being considered would include a
five to eight percent adjustment in payment made after each planned
performance period in the projected five to eight states selected to
participate in the model. A HHA VBP model presents an opportunity to
test whether larger incentives would lead to higher quality of care for
beneficiaries. If CMS decides to move forward with the implementation of
an HHA VBP model in CY 2016, it intends to invite additional comments on
a more detailed model proposal to be included in future rulemaking.
The final rule This link will change once the rule is published on
Nov. 6, 2014 in the Federal Register.
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