CMS to Cut Home Health Medicare Payments by $58 Million in 2015

The Centers for Medicare & Medicaid Services (CMS) proposed changes Tuesday that would reduce Medicare payments to home health agencies by 0.3% in 2015.

The proposed rule for 2015 cuts the Medicare home health prospective payment system (HH PPS) by $58 million, and reflects the effects of the 2.2% home health payment update percentage — a $427 million increase — and 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, CMS announced Tuesday.

Based on the most recent data available, CMS estimates that about 3.5 million beneficiaries received home health services from nearly 12,000 home health agencies, costing Medicare approximately $18 billion in 2013.


The changes, including adjustments to face-to-face encounter requirements, would “foster greater efficiency, flexibility, payment accuracy, and improved quality,” CMS says.

Changes would eliminate the narrative requirement for face-to-face encounters, during which physicians must explain the clinical findings of the encounter to support that the patient is homebound and in need of skilled services.

Many home health care providers argue this requirement leads to more CMS denials. However, physicians will still need to certify that a face-to-face patient encounter occurred and document the date of the encounter as part of the certification of eligibility.


CMS also recently told the National Association for Home Care & Hospice (NAHC) that it is reversing its previous position on the face-to-face requirement for Medicare Advantage (MA) plan members who receive home health care services, saying that a Medicare Advantage Organization’s (MAO) authorization for home health services may substitute for the original Medicare face-to-face certification requirement.

Other proposed changes to face-to-face encounters include consideration only for medical records from the patient’s certifying physician or discharging facility in determining initial eligibility for the Medicare home health benefit. Certification/re-certification of eligibility for home health services — not the face-to-face encounter visit — would be considered a non-covered service if the HHA claim was non-covered because the patient was ineligible for the home health benefit.

CMS is proposing to recalibrate the HH PPS case-mix weights by adjusting the weights relative to one another, using calendar year 2013 home health claims data, to ensure that the case-mix weights reflect the most current utilization and resource data available.

Rate-setting changes would be made to the wage index using a blended wage index for a one-year transition. For each county, a blended wage index would be calculated as 50% of the 2015 wage index using the current Office of Management and Budget (OMB) delineations and 50% of the 2015 wage index using the revised OMB delineations.

The Affordable Care Act has required that CMS rebase the 60-day episode rate. The rule implements increases to the national per-visit payment rates, a 2.82% reduction to the NRS conversion factor, and a reduction to the national, standardized 60-day episode rate of $80.95 for 2015. The proposed national, standardized 60-day episode payment for 2015 is $2,922.76.

The conditions of participation for speech-language pathologists would also be adjusted.

CMS is inviting comment on a value-based purchasing (VBP) model for HHAs in certain states that it is considering testing, to begin in 2016.

Written by Cassandra Dowell

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