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  • Proposed Home Health Rule Includes Planned $180 Million Reduction, Shift to Cost-per-Unit System for Outlier Payments

    The Centers for Medicare and Medicaid Services (CMS) has issued a proposed rule for the 2017 Medicare home health prospective payment system (HH PPS) that would continue a planned series of cuts that began in 2014, with an estimated overall 1% reduction, or about $180 million, scheduled for next year. The proposal, released on June 27, also includes a move away from cost-per-visit in favor of a cost-per-unit system for outlier payments, a plan to make separate payments for negative pressure wound therapy (NPWT) devices, and refinements to a value-based purchasing model used in 9 states.

    APTA regulatory affairs staff is reviewing the proposed rule and will submit comments on the proposal to CMS. PT in Motion News will publish a report summarizing those comments; in the meantime, here are some key features of the changes that may be happening next year.

    Payment. Overall, CMS projects payment adjustments would result in an estimated 1% reduction, or $180 million, in 2017. This adjustment continues a set of reductions mandated by the Affordable Care Act, which have ranged from $60 million in 2015 to $260 million in 2016. CMS arrived at the overall estimate by weighing a 2.3% payment increase against various decreases, mostly related to reductions in the 60-day episode payment rate and cuts to account for nominal growth in case mix.

    Home Health Quality Reporting Program. The proposed rule would add 4 measures to the Home Health Quality Reporting Program, but not until 2018. The new measures focus on hospital readmissions, total estimated Medicare spending per beneficiary, discharge to the community, and medication reconciliation. The proposed rule also requires home health agencies (HHAs) to submit both admission and discharge outcome and assessment information set (OASIS) data for at least 90% of all patients whose episodes of care occurred during the reporting period.

    Outlier payments. CMS is proposing a change to the way it calculates the payments it makes for episodes that go beyond the typical range of care, moving from a cost-per-visit approach to a cost-per-unit approach, with 15 minutes comprising a unit. The proposal also includes an adjustment to the fixed-dollar loss ratio, intended to keep outlier payment ratios in compliance with requirements in the Social Security Act.

    NPWT payments. The proposed rule would create a system for separate payments to HHAs for disposable NPWT devices used with beneficiaries, no longer allowing for time spent furnishing NPWT to be a part of a home health visit claim paid under the HH PPS. Instead, that element of care would be paid for separately, in line with rates in the CMS outpatient prospective payment system.

    Value-Based Payment Model. HHAs in Arizona, Florida, Iowa, Maryland, Massachusetts, Nebraska, North Carolina, Tennessee, and Washington would continue their participation in a value-based payment system with a few tweaks to some reporting processes and timeframes. Beginning in 2018, the HHAs in these states will receive payment increases or reductions based on 2016 performance data. The adjustment process will continue each year from 2018 to 2022, with the range of payment adjustment increasing incrementally, from a potential 5% increase or decrease in 2018 to an 8% adjustment upward or downward in 2021 and 2022. CMS anticipates saving $380 million through reductions in unnecessary hospitalizations and skilled nursing facility usage through this model.


    • Time for P.T.'s to go into the Home Health private pay/cash business like some have in private practice.

      Posted by Larry Greenberg on 6/29/2016 9:43 PM

    • When I worked home health, we had to submit admit and discharge OASIS data on all our patients. How is requiring HHAs to submit 90% of them going to improve anything?

      Posted by Douglas Hackett on 7/20/2016 8:14 PM

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