CMS Proposes Sweeping Cuts to Home Health Payment System

The Centers for Medicare & Medicaid Services (CMS) look to eliminate nearly 200 payment codes from the current Home Health Prospective Payment System (HH PPS). 

The proposed rule would remove 170 codes from the HH PPS Grouper when it takes effect January 1, 2014, as part of the federal agency’s work to transition from the current ICD-9 to ICD-10 code set.

Codes considered “too acute” for home health care will be included in the CMS cuts, as well as others that would not require home health intervention based upon clinical judgement. 


CMS also proposes to adopt two claims-based quality measures such as rehospitalizations and emergency department use during the first 30 days of home health utilization. 

“Addressing unplanned hospital readmissions is a high priority for HHS as our focus continues on promoting patient safety, eliminating healthcare associated infections, improving care transitions, and reducing the cost of healthcare,” writes CMS. 

For all home health agencies, the estimated impact for 2014 is a net rate reduction of 1.5%. This also includes the 3.4% decrease in payments due to the effects of rebasing that CMS will impose next year. 


As a result of the updated HH PPS, CMS estimates that the net impact of the proposals in its rule will be $290 million in savings for calendar year 2014. 

View the proposed rule.

Written by Jason Oliva

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