CMS recently issued the proposed rule (CMS-1353P) regarding 2012 payment rates. The proposal includes an estimated net decrease of $650 million compared to Home Health payments in CY 2011 as well as revisions to the hotly discussed face to face rule and the therapy assessment rule.

Here is a brief list of the proposed rule:

1. Proposed 2012 payment base episode rates are updated to $2112.37 from the current $2192.07. This is a rate negative of approximately 3.50%.
2. The rate changes are due to a proposed 2.5% market basket index inflation update, a 1.5 point reduction in the Market Basket Index and wage update under the Affordable Care Act, and a 5.06% case-mix creep adjustment.
3. The increase in the case-mix creep adjustment is due to the evaluation of 2009 coding weight changes. CMS found that ¾ of the coding increases were a result of increases in therapy visits above the 14 and 20 visit thresholds. (A $950 million decrease is projected)
4. The 3.56% rate reduction will unevenly impact individual providers. CMS proposes to make significant changes in coding weights by eliminating two hypertension codes as a factor in the calculation (as had been proposed in CY2011), reducing the payments on therapy episodes, recalculating the Home Health PPS case-mix weight yet increasing weights on non-therapy episodes. Providers with high volumes of therapy cases could see greater net rate reductions. A provider-specific analysis using the provider’s particular case mix is the only reliable way to assess impact to a specific agency.
5. CMS proposes to change the face-to-face rule and allow physicians who care for patients in acute and long term care to do the encounter and report the information to another physician who completes the certification and plan of treatment documentation.
6. CMS proposes to clarify the therapy assessment standard where more than one discipline is involved.

Summary

Though provisions of the Affordable Care Act (ACA) mandate that CMS apply a one (1) percentage point reduction to the CY 2012 home health market basket amount; this would equate to a proposed 1.5 percent updated reduction for HHAs next year and many agencies had hoped it would be postponed.   Home health payment rates have been updated annually by either the full home health market basket percentage increase, or by the home health market basket percentage increase as adjusted by Congress.   CMS uses the home health market basket index, which measures inflation in the prices of a specific mix of goods and services included in home health services.  The Deficit Reduction Act of 2005 requires an adjustment to the home health market basket percentage update depending on HHAs submission of quality data.  The proposed home health market basket increase for CY 2012 is the 1.5 percent.

“CMS’s proposal reflects our commitment to ensure that we pay accurately for Medicare home health services as we improve the structure of our payment system and decrease incentives for upcoding,” said Jonathan Blum, Deputy Administrator and Director of the Center for Medicare.

In a separate proposed rulemaking filed (CMS-2348-P), CMS would require comparable face-to-face (F2F) encounters for people receiving Medicaid home health services to adhere to the unifying nature of these provisions made under the Affordable Care Act. The proposal aligns the Medicaid time frames with the Medicare time frames while providing some flexibility to individual states to determine the content and expected documentation. The proposal also reaffirms CMS’s position that a homebound requirement in Medicaid home health is not permitted. The proposal also offers clarifications on the coverage of medical supplies and equipment.

Source:

The proposed rules can be found at: http://www.cms.gov/HomeHealthPPS/HHPPSRN/itemdetail.asp?filterType=none&filterByDID=0&sortByDID=3&sortOrder=ascending&itemID=CMS1249242&intNumPerPage=10