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CMS proposes HHA payment changes
Market basket update, 60-day episode
An additional $140 million in payments to home health agencies will be made in 2008 if the rule proposed by the Centers for Medicare & Medicaid Services (CMS) is approved. The proposed rule includes a requirement to report quality data and a reduction in the 60-episode payment rate.
The proposed rule contains the first refinements to the Medicare home health prospective payment system (HH PPS) since 2000 and also contains the annual update to the Medicare HH PPS payment rates.
"The proposed home health prospective payment system for calendar year 2008 furthers Medicare's commitment toward making accurate payments in all of its payment systems. For home health agencies, the proposed rule seeks to improve the appropriateness and performance of care for Medicare beneficiaries," said CMS Acting Administrator Leslie V. Norwalk.
The proposed rule includes a provision to continue to adjust payment for reporting of quality data. HHAs that submit the required quality data would receive payments based on the proposed full home health market basket update of 2.9% for calendar year 2008. If a HHA does not submit quality data, the home health market basket percentage increase would be reduced by two percentage points to 0.9% for 2008.
The proposed rule adds two National Quality Forum-endorsed measures to the 10 that are currently reported: emergent care for wound infections deteriorating wound status and improvement in status of surgical wound.
Episode payment to be reduced in 2008
CMS analysis of the latest available home health claims data indicates a significant increase in the observed case mix since 2000 and that the case mix increase is due to changes in coding practices and documentation rather than treatment of more resource-intensive patients, according to CMS representatives. To account for the changes in case-mix that are not related to a home health patient's actual clinical condition, this rule proposes to reduce the national standardized 60-day episode payment rate by 2.75% per year for three years beginning in 2008.
The proposed case mix model includes a proposal to replace the current therapy threshold at 10 visits per episode with three new therapy thresholds at six, 14, and 20 therapy visits. The new levels would have graduated payment levels between the proposed therapy thresholds to reduce incentives to inappropriately target higher thresholds. These proposed changes would significantly increase the case mix model's ability to more appropriately reflect HHA costs and consequently provide more accurate payments to HHAs.
Changes to the low utilization payment adjustment and payment for non-routine medical supplies are also addressed by the proposed rule.
The proposed rule is available on the CMS web site at www.cms.hhs.gov/center/hha.asp and background information on the differences between the current HH PPS and the proposed refinements and updates of this rule can be found at www.cms.hhs.gov/apps/media/press/release.asp?Counter=2133.