FACT SHEET
FOR IMMEDIATE RELEASE Contact: CMS Media Relations
June 27, 2013
CMS PROPOSES PAYMENT CHANGES FOR MEDICARE HOME HEALTH AGENCIES FOR 2014
The
Centers for Medicare & Medicaid Services (CMS) today announced
proposed changes to the Medicare home health prospective payment system
(HH PPS) for calendar year (CY) 2014 that would foster greater
efficiency, flexibility, payment accuracy, and improved quality. Based
on the most recent data available, CMS estimates that approximately 3.5
million beneficiaries received home health services from nearly 12,000
home health agencies, costing Medicare approximately $18.2 billion in
2012.
In
the rule, CMS projects that Medicare payments to home health agencies
in calendar year (CY) 2014 will be reduced by 1.5 percent, or $290
million based on the proposed policies. The proposed decrease reflects
the effects of the 2.4 percent home health payment update percentage
($460 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 ($650 million decrease), and the effects of ICD-9-CM coding adjustments ($100 million decrease).
In
addition, the rule proposes routine updates to the HH PPS payment rates
such as updating the payment rates by the HH PPS payment update
percentage and updating the home health wage index for 2014.
Background
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, or need physical therapy, 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
Medicare-participating home health agencies. 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 services.
HH PPS Grouper Refinements and ICD-10-CM Conversion
The
proposed rule would remove two categories of ICD-9-CM codes from the HH
PPS Grouper: diagnosis codes that are “too acute,” meaning the
condition could not be appropriately cared for in a home health setting;
and diagnosis codes for conditions that would not impact the home
health plan of care, or would not result in additional resources when
providing home health services to the beneficiary. ICD-10-CM codes will
be included in the HH PPS Grouper to be used starting on October 1,
2014. The new ICD-10-CM codes will replace the existing ICD-9-CM codes
used to report medical diagnoses and inpatient procedures.
Rebasing the 60-day Episode Rate
The
Affordable Care Act requires 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) in any given year, and be
fully implemented by CY 2017.
The
rule proposes a reduction to the national, standardized 60-day episode
rate of 3.5 percent in each year CY 2014 through CY 2017. The proposed
national, standardized 60-day episode payment for CY 2014 is $2,860.20.
This reduction primarily reflects the observed reduction in the number
of visits per episode since establishment of the HH PPS in 2000.
Rebasing Per-Visit Amounts
For
episodes with four or fewer visits, Medicare pays on the basis of a
national per-visit amount by discipline, referred to as a
Low-Utilization Payment Adjustment (LUPA). The rule proposes an increase
to each of the per-visit payment rates of 3.5 percent in each year CY
2014 through CY 2017 to account for changes in the costs of providing
these services since the establishment of the HH PPS in 2000.
Rebasing and Updating Other Components of the HH PPS
Similar
to the proposals for rebasing 60-day episodes and per-visit rates, this
proposed rule would rebase the payment for NRS and update the LUPA
add-on payment amount. The rule proposes a decrease in the NRS
conversion factor of 2.58 percent in each year CY 2014 through CY 2017.
In updating the LUPA add-on amount and proposing three LUPA add-on
factors, LUPA add-on payments are estimated to increase by approximately
4.8 percent (using rebased per-visit amounts described above that were
increased by 3.5 percent).
Quality Reporting
The
proposed rule would add two claims-based quality measures: (1)
Rehospitalization During the First 30 Days of a Home Health Stay, and
(2) Emergency Department Use Without Hospital Readmission during the
first 30 days of Home Health. The proposed rehospitalization measures
will allow HHAs to further target patients who entered home health after
a hospitalization. In addition, this rule would reduce the number of
home health quality measures currently reported to home health agencies
to simplify their use for quality improvement activities.
Cost Allocations for Home Health Agency Surveys
This
proposed rule would ensure that Medicaid responsibilities for home
health surveys are explicitly recognized in the State Medicaid Plan. CMS
seeks comment on a methodology for calculating State Medicaid programs’
fair share of Home Health Agency surveys costs. For that portion of
costs attributable to Medicare and Medicaid, we would assign 50 percent
to Medicare and 50 percent to Medicaid, the same methodology that is
used to allocate costs for dually-certified nursing homes.
For additional information about the Home Health Prospective Payment System, visit https://www.cms.gov/Medicare/
The proposed rule can be viewed: http://federalregister.gov/
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