Posts Tagged ‘Home Health Prospective Payment System (HHPPS)’

Goverment Shutdown Delays Release of CMS Final Rule on Home Health Rate Rebasing

October 25, 2013

Yesterday, the Centers for Medicare and Medicaid services delayed the release of the CY 2014 Home Health Prospective Payment System (PPS) Final Rule for nearly a month.

This is a delay to the original issue date of November 2nd that was announced. CMS is still a determining the effects of the partial government shutdown on their ability to complete 2013 Medicare fee-for-service payment regulations including the home health PPS rule and physician fee schedules.

The current proposed rule would cut medicare payments by 3.5% per year for four years, leading to an overall cut of 14% to the home health medicare payment rate. Despite the delay in announcing the final rule, it is still scheduled to take effect January 1st, 2014.

HCAF intends on using this additional time to educate our members at our Fall District Meetings (running from 11/12-11/25) on how they should prepare for the different possible outcomes of this final rule.

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Rate Rebasing in the 2014 HHPPS Proposed Rule

August 9, 2013

The National Association for Home Care & Hospice (NAHC) recently published a white paper entitled, Rate Rebasing in Medicare Home Health Services: A Review of the 2014 HHPPS Proposed Rate Rule, which offers home health care providers an in-depth look at how CMS’ proposed rebasing rules will affect them. Below are some excerpts from the white paper:

Background

The Patient Protection and Affordable Care Act of 2010 (PPACA) requires that Medicare reset or rebase the home health services episode payment rate beginning
in 2014 and phased-in proportionately over a four (4) year period. The legislative mandate provides some direction to Medicare on the factors required to be considered in the calculation of the rebased payment rate.

MedPAC recommended that home health services payment rates be rebased because of significant changes in the nature of the services provided during the
 60 episode of care along with what it perceived to be “overpayments” for services evidenced by continuing double-digit Medicare margins in comparison to costs. The average episode of care in the base year used for rate setting involved 37 visits primarily made up of nursing and home health aide services while the current care utilization in an episode is less than 20 visits with few aide services and significantly more therapy visits. From 2001 through 2011, MedPAC’s calculation of margins shows freestanding HHAs with an average ranging from 16-18%

On June 27, 2013, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule that sets out the proposed rates for home health services in 2014 along with the methodology used by CMS in calculating such.

While the proposed rule states that the impact on home health services spending would be a reduction of $290 million in
CY 2014, in actuality it is far greater as the proposal, if finalized, would trigger four consecutive years of 3.5% reductions in the primary payment rates, totaling a 14% reduction by 2017. That level of rate cuts is estimated to reduce Medicare home health spending by well in excess of $25 billion over the next ten years.

The proposed rule is open for the submission of written public comments through August 26, 2014. This White Paper offers a report on the makeup of the proposed rule, an impact analysis, and a critical review of its shortcomings.

The Proposed Rule

General

The CMS proposed rule combines a rebasing of the base-level rates for normal episodes, per visit payments for Low Utilization Payment Adjustment (LUPA) episodes, and the add-on payments for Non- Routine Supplies (NRS) along with a recalibration of the case-mix weights assigned to each of the categories within the case-mix adjuster.

This presents a complication in an initial review as it makes the 2014 proposed rates seem much greater than the 2013 rates. However, the recalibration is proposed in a budget neutral manner by reducing each of the case-mix categories by 26.02%. (Alternatively, by dividing the case mix weights by 1.3517 which CMS states is the average weight in early 2012).

The Proposed Rates

The proposed rated for 2014 reflect a 2.4 Market Basket Index adjustment to reflect estimate costs increases in 2014. In addition, these rates reflect a rebasing adjustment of -3.5% for episodes, +3.5% for per visit LUPA rates, and -2.58% for Non-Routine Supplies.

Impact of Proposed 2014 HHPPS Rates

CMS estimates that the overall impact of the proposed rate rebasing and other rate changes is a reduction in Medicare spending of $290 million in 2014. That represents a decrease of approximately 1.5% in comparison to estimated 2013 payments.

The impact analysis performed by NAHC demonstrates that the continued delivery of home health services throughout the country is at high risk if the proposed rule is finalized. NAHC estimates that by 2017, 72.29% of all HHAs will be paid less than the cost of care and that the average Medicare margin will be -9.77%.

This estimate come by way of reviewing over 8,200 FYE 2011 cost reports from all types of HHAs from all over the country. In Alaska (91.7%), Hawaii (100%), New York (89.9%) and Oregon (87.2%) in can be expected that the entire home health infrastructure is at risk of crumbling to nothing. That is certain to lead to an access to care crisis and increased Medicare spending as patients seek care in the only viable option remaining: high cost care settings.

Conclusion

Rate rebasing is not a simple task for CMS. It has serious consequences to Medicare, providers of care and the patients served. As such, it must be performed carefully and correctly.

The CMS proposal fails on numerous counts, but most notably in the absence of any consideration as to its impact on access to care. The proposal should be abandoned and replaced with one that puts care access first, considers all methods of calculating rates, recognizes all of the current costs of care, and includes an appropriate margin to secure operating capital and a fair return on investment to allow for continued modernization of home health care for today’s health care delivery innovations.

The full text of the white paper is available here.

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CMS Proposes 1.5 Percent Cut to Home Health Payments

June 27, 2013

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. (more…)

Analysis: Florida Home Health Medicare Margins on Steep Decline

June 6, 2013

The Home Care Association of Florida in coordination with the Partnership for Quality Home Healthcare today released data demonstrating that the rebasing of Medicare home health payments within the proposed Home Health Prospective Payment System (HHPPS) rule for 2014 will negatively impact Florida’s home health sector and the 342,570 vulnerable Medicare beneficiaries receiving home health by driving Medicare margins to an all-time low. Leaders are urging regulators to carefully consider home health sector’s current-law economics when implementing this policy.

Under the Affordable Care Act (ACA), the Centers for Medicare & Medicaid Services (CMS) is directed to rebase home health payments between 2014 and 2017 by a percentage determined appropriate by the Secretary.  This percentage is to be implemented in equal increments during each year from 2014 through 2017. (more…)

CMS Home Health, Hospice & DME Open Door Forum

December 3, 2012

Session Updated Information on 2013 HHPPS Final Rule

The Centers for Medicare & Medicaid Services held its latest Home Health, Hospice, and Durable Medical Equipment (DME), Prosthetics, and Orthotics Open Door Forum on Nov. 28, that updated information on the 2013 home health prospective payment (HHPPS) final rule, Home Health Consumer Assessment of Healthcare Providers and Systems (HHCAHPS), home health and hospice quality measure reporting, and hospice claims processing issues.

HHPPS Final Rule (more…)

CMS Issues Clarification on Implementation Date for Functional Reassessment Requirements for 2013

November 28, 2012

As a follow-up to the issuance of the Home Health Prospective Payment System (HH PPS) Calendar Year (CY) 2013 Final Rule, CMS has updated its website to clarify that the therapy provisions will be effective for episodes beginning on or after January 1, 2013. Please see the language bolded under the first bullet on the CMS HHA Center webpage. (more…)

CMS Publishes 2013 Wage Index for HHAs

November 7, 2012

The Centers for Medicare & Medicaid Services issued the final rule to update the Home Health Prospective Payment System (HHPPS) rates for Calendar Year 2013. Payments to home health agencies are estimated to decrease by approximately -0.01 percent or $10 million in CY 2013. (more…)