CMS issued a proposed rule on July 6, 2015 that includes the annual payment rate update along with the Value-Based Purchasing (VBP) pilot program. Florida was selected as the only large state in the VBP pilot program leaving out California and Texas. Many suspect that was not a coincident and that the “random” selection that CMS touted was not truly random. Although HCAF has long supported the shift towards improving and rewarding quality care, this new proposed rule has many elements that are cause for concern. It is yet again another overreach by CMS that could be highly punitive to all HHAs in Florida who will be dealing with this on top of the CMS proposed cuts in reimbursement for 2016. It is imperative that Florida providers start preparing now for this significant change and HCAF is here to help you get started. Every minute of every day counts at this point.
We have created a hub on our HCAF website for our members to understand the rule, take action against it, and also prepare for the impending VBP pilot, which will begin in 6 short months. Please visit our page regularly, as we will continue to analyze the rule and post more resources for you to read.
Key Points for Florida HHA’s in 2016 Proposed Rule:
- CMS officially designated Florida as one of the states in the VBP pilot. This means that in 2016, all certified HHAs in Florida will be forced to participate in and be impacted by a new payment model, aimed at improving and rewarding quality care. Agencies in Florida will have payments adjusted depending on the degree of quality performance achieved. Payments would change by 5% in each of the first two payment adjustment years, 6% in the third year and 8% in the final two years, CMS says. The value-based purchasing proposed program would be implemented Jan. 1, 2016 and end Dec. 31, 2022. The first year of adjusted payments would occur in 2018 but will be tied back to your performance results in 2016.
- The basic PPS rule held no real surprises but continues to put forth more painful cuts. It simply carries out the third year of a four year phase-in of the rate rebasing plan. Congress required that the rate rebasing be done with equal installments over 2014 through 2017. CMS is capped at reducing the base episode rate by no more than $80.95 which is equal to 3.5% each year. So we are facing another 3.5% cut that will be slightly offset by the Market Basket increase. In the end CMS estimates that the net result of all of its rate proposals is a 1.8% reduction in Medicare payments to home health agencies or $350 million in 2016.
- What was a surprise was CMS’s proposal to reduce rates for perceived “coding creep”. CMS alleges that HHAs have up-coded claims to levels that do not reflect actual changes in patients’ clinical condition. Coding creep adjustments have been imposed in the past. In the 2015 rate rule, CMS estimated the coding creep at 2.32%. With an additional data year, the level has risen to 3.44%. CMS proposes to phase-in the creep adjustment at 1.72% in each of 2016 and 2017 to penalize agencies for what they call “case mix creep.”
- While, the proposal rule does not reference the 2% sequestration cut specifically, it is definitely expected that will continue in 2016 along with all the cuts mentioned above.