From: Federal Register – CMS-1648-P; Filed 6/27/16; Publication 7/5/16
Excerpt of CMS Fact Sheet –
Today, the Centers for Medicare & Medicaid Services (CMS) announced proposed changes to the Medicare home health prospective payment system (HH PPS) for calendar year (CY) 2017 that would foster greater efficiency, flexibility, payment accuracy, and improved quality. Approximately 3.4 million beneficiaries received home health services from approximately 11,400 home health agencies, costing Medicare approximately $17.8 billion in 2015.
In the rule, CMS projects that Medicare payments to home health agencies in CY 2017 would be reduced by 1.0 percent, or $180 million based on the proposed policies. The proposed decrease reflects the effects of the 2.3 percent home health payment update percentage ($420 million increase); 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 ($420 million decrease); the effects of the -0.97 percent adjustment to the national, standardized 60-day episode payment rate to account for nominal case-mix growth for an impact of -0.9 percent ($160 million decrease); and the effects of the proposed increase to the fixed-dollar loss (FDL) ratio used in determining outlier payments from 0.45 to 0.56 for an estimate impact of -0.1 percent ($20 million decrease).
To be eligible for the home health benefit, beneficiaries must need intermittent skilled nursing or therapy services and must be homebound and under the care of a physician. Covered home health services include skilled nursing, home health aide, physical therapy, speech-language pathology, occupational therapy, medical social services, and medical supplies. Home Health Agencies (HHAs) are paid a national, standardized 60-day episode payment for all covered home health services, adjusted for case-mix and area wage differences.
The HH PPS proposed rule is one of several rules for calendar year 2017 that reflect a broader Administration-wide strategy to create a health care system that results in better care, smarter spending, and healthier people. 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 achieving better health outcomes, preventing disease, helping patients return home, helping manage and improve chronic diseases, and fostering a more-efficient and coordinated health care system.
Payment Policy Provisions
Rebasing the 60-day Episode Rate
The Affordable Care Act directs CMS to 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. 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).
In this proposed rule, CMS would complete the final year of the four-year phase-in of the rebasing adjustments to the HH PPS payment rates. As finalized in the CY 2014 final rule, the CY 2017 rebasing adjustment to the national, standardized 60-day payment rate is -$80.95. The overall impact due to the rebasing adjustments is estimated to be a -2.3 percent decrease in HH PPS payments for CY 2017. As noted above and further below, this is offset by the home health payment update percentage, which would increase overall HH PPS payments in CY 2017 by 2.3 percent.
Updates to Reflect Case-Mix Growth
CMS will implement a 0.97 percent reduction to the national, standardized 60-day episode rate in CY 2017 to account for nominal case-mix growth from 2012 to 2014 (prior to rebasing). CY 2017 will be the second year of the three-year phase-in of the reduction to account for nominal case-mix growth. The -0.97 percent adjustment to the national, standardized 60-day episode payment rate to account for nominal case-mix growth results in an estimated decrease in HH PPS payments for CY 2017 of -0.9 percent.